Satisfying RMD on multiple Bene IRA’s
Satisfying RMD on multiple Bene IRA’s
Hypothetical: Decedent designates his son and daughter to share equally his trad IRA . In the ryear of death, Son withdraws his bene IRA in its entirety; Daughter makes no withdrawal. Son’s withdrawal is more than the total amount of RMD owed by decedent. Has the decedent’s RMD been satisfied? or is daughter required to withdraw 1/2 of the RMD amount from her bene IRA before the end of the year of decedent’s death?
Corollary: If A (a non spouse of decedent) inherits 2 separate IRA’s from same decedent can the RMD requirement for the year of death be satisfied from only one of the IRA’s ?
Permalink Submitted by mk foss on Wed, 2010-10-13 23:27
As long as the decedent’s RMD is withdrawn in the year of death, you’re fine. It does not have to come pro-rata from the beneficiaries. In Rev. Rul 2005-36 the IRS okayed a situation where one beneficiary took the decedent’s RMD, then disclaimed and all future distributions were made to the contingenet beneficiary – not your case of course but an example that shows that what you propose is fine.
Permalink Submitted by Alan Spross on Thu, 2010-10-14 00:12
Other question: Yes, if the IRA is inherited from the same decedent, the RMD can be aggregated, both for the decedent’s final RMD or the beneficiary’s own continuing RMDs in later years.
That said, there are some factors that could result in different divisors for those RMDs so they should still be calculated separately to get the total figure, which can then be aggregated. One of those factors would be where separate accounts are not created be the deadline if their are multiple beneficiaries on one IRA, but the other IRA has just one beneficiary on it.
Permalink Submitted by John Hemphill on Thu, 2010-10-14 13:54
Thanks for the good information and the rev Ruling reference.
john