RMD for 2009
We have an existing account: Joe Smith IRA R/O Deceased FBO Joanne Smith Deceased. This account was established many years ago. Joanne Smith was the beneficiary of this IRA. Joanne Smith passed away on October 27, 2009. There was money paid out on 8/31/09 for $35,000. The deceased woman’s husband is the beneficiary of the account and is in the process of opening a beneficiary IRA. There are a few questions regarding this account.
The beneficiary wants to return the distribution of $35,000 before the end of the year, because there was no RMD in effect for 2009. Is it possible to replace this distribution even though 60 days had elapsed? The beneficiary wants to send back this distribution. Is there any way to do this, as his wife died in October and he feels there wasn’t sufficient opportunity for him to replace the RMD in this time frame?
Please let us know if it is possible to replace this distribution before the end of the year, and if so, is there any documentation required.
The new account for the beneficiary will be opened as Howard Hill Beneficiary IRA Joanne Smith Deceased. Is this account subject to a distribution?
Permalink Submitted by Alan Spross on Wed, 2009-12-23 19:58
Need to backtrack somewhat here – What was the relationship between Joe and Joanne? And if Joanne was the surviving spouse of Joe, was the IRA left in beneficial form rather than assumed ownership for a specific reason such as Joanne’s age being under 59.5?
If Joanne was a non spouse beneficiary, there would be no relief from reporting the distribution under any circumstances, but pending the above requested info, there may be justification to pursue this further.
Finally, IF Joanne was the surviving spouse of Joe, was there any evidence she planned to roll over the distribution, and what was done with the 35,000 between distribution and her death?
Permalink Submitted by Richard Dreskin on Wed, 2009-12-23 20:27
Joe Smith was Joanne’s father. She was the beneficiary of his IRA.
Permalink Submitted by Alan Spross on Wed, 2009-12-23 20:49
In that case, the answer is that no relief is available because a non spouse beneficiary cannot do a rollover under any circumstances. That restriction also extended to the RMD relief in Notice 2009-82 resulting in no rollback of RMDs for non spouse beneficiaries since to qualify for rollover relief the distribution would have had to be rollover eligible.
For this beneficiary IRA, RMDs must continue next year for Howard Hill, the successor beneficiary using a continuation of Joanne’s non recalculated single life expectancy if that is what Joanne was using. He would need to know her age in the year after her father’s death to establish the starting divisor and then 1.0 would be subtracted from that divisor for each succeeding year and for these purposes 2009 would count as a year for determining the 2010 divisor.
Permalink Submitted by Richard Dreskin on Wed, 2010-01-20 15:51
Thank you for answering my prior question. I just want to make sure that a nonspousal inherited benificary IRA cannot contribute to this IRA and it cannot be roll over into anothe IRA.
Thanks again.
Permalink Submitted by Alan Spross on Wed, 2010-01-20 21:08
It is correct that no new contribution can be made to the inherited non spouse IRA.
This account cannot be rolled over by any indirect rollover, but it CAN be directly transferred to another IRA custodian. It could also be transferred into another inherited IRA account that was inherited from the same original IRA owner, however this should not be done if for any reason the RMD requirement for the two inherited IRAs was different.