RMD for inherited non-spousal IRA
My 77-year old Dad died Feb. 2008, without taking any 2008 RMD from his IRA. His 5 children equally inherited it, each setting up an inherited IRA with the same brokerage firm. I was told his 2008 RMD was to be taken out by all of us in some combination by 4/1/2009.
1) Is that date correct? Should it have been 12/31/2008?
2) This seems to require some joint cooperation by us in taking the distribution. This is not a problem, but doesn’t seem to make sense. Five accounts responsible as one entity for taking the RMD? Is that correct?
Permalink Submitted by Alan Spross on Tue, 2009-02-17 16:43
1) Yes, the date should have been 12/31/08, but the IRS typically excuses the excess accumulation penalty if the beneficiary files a Form 5329 requesting waiver for reasonable cause per 5329 Inst. p 6. Evidence of the RMD distribution taken in 2009 should be included with an indication that it was taken as soon as the deficiency was discovered.
2) It does not matter which combination of beneficiaries takes the RMD. Perhaps one of you actually needs the funds, and could take the RMD for the rest as well. The RMD will be taxable to whoever takes the distribution. Evidence of the RMD distribution should be provided to the other beneficiaries just to document their files in the event the IRS ever inquires.
For 2009, you ordinarily would each take RMDs using your individual life expectancies, but the 2009 RMD has been waived by recent legislation. Therefore, your next RMDs will be due no later than 12/31/2010.
Permalink Submitted by Mike Rossini on Tue, 2009-02-17 17:55
Alan,
Thanks so much your help!