deceased rmd sent to benies under benies SS number
client had IRA and passed away this year in Feb 2015. She did not take her 2015 rmd.
The two benies are splitting the account into two inherited IRA’s and will take their inherited rmd’s next year (one year after date of death)
However, the company is stating they will send the clients RMD for 2015 directly to the two beneies (split 50/50) under the two benies SS numbers.
the company is stating that their is a place on the tax form to show that it was for the deceased 2015 rmd and not theirs.
is this correct or should the company be sending the rmd to the estate of the deceased under the deceased SS number?
Thank you,
Douglas
Permalink Submitted by Jose Morales on Fri, 2015-06-05 15:45
The beneficiaries are responsible for taking the deceased’s RMD for 2015 and it must be reportable to their SSN, not the estate. The 1099-R issued for the distribution will have distribution code 4 which lets the IRS know that it was a distribution due to the death of the IRA owner.
Permalink Submitted by Alan - IRA critic on Fri, 2015-06-05 17:01
In addition, there is no such specific entry on their tax returns that flag the year of death RMD. The 1099R and the beneficiary 1040 forms for 2015 will be no different than later years when the beneficiaries life expectancy will apply. Also, the year of death RMD can be taken in any combination by the beneficiaries, therefore if one beneficiary needs the money and the other does not, the entire year of death RMD can be distributed to the beneficiary who needs it. Some custodians probably wish to avoid accounting when unequal amounts are distributed, and will push for the year of death RMD to be split according to the % each beneficiary inherits, but this is not an IRS requirement.