Permalink Submitted by Alan - IRA critic on Wed, 2014-02-26 22:41
An appraisal may be required periodically to establish a year end value for RMD purposes. The prohibited transactions rules apply to the beneficiary just as they did for the owner, so the beneficiary should not do anything until they consult with the custodian (probably a self directed IRA custodian) to find out how the IRA, the custodian, the tenants if any, etc operate. Liquidity is another concern because of the RMD requirements. It might be to the beneficiary’s advantage to have the IRA sell the property if this is more than they want to deal with.
Permalink Submitted by mk foss on Tue, 2014-03-04 01:37
Beneficiaries begin taking RMDs the year after the death of the original owner. So Alan’s point about liquidity is well taken. Without a source of funds or a sale of the property, an undivided interest in the property may need to be transferrd to the beneficiary. The appraisals are the basis for the RMDs but there is no “step up” in basis with an inherited IRA.
Permalink Submitted by Alan - IRA critic on Wed, 2014-02-26 22:41
An appraisal may be required periodically to establish a year end value for RMD purposes. The prohibited transactions rules apply to the beneficiary just as they did for the owner, so the beneficiary should not do anything until they consult with the custodian (probably a self directed IRA custodian) to find out how the IRA, the custodian, the tenants if any, etc operate. Liquidity is another concern because of the RMD requirements. It might be to the beneficiary’s advantage to have the IRA sell the property if this is more than they want to deal with.
Permalink Submitted by mk foss on Tue, 2014-03-04 01:37
Beneficiaries begin taking RMDs the year after the death of the original owner. So Alan’s point about liquidity is well taken. Without a source of funds or a sale of the property, an undivided interest in the property may need to be transferrd to the beneficiary. The appraisals are the basis for the RMDs but there is no “step up” in basis with an inherited IRA.