IRA RMD, death, and spousal take over

Submitted by Jim Shope on Thu, 2015-09-03 16:04

I have a confusion/complicated question regarding IRA RMDs and the death of a client almost at RBD age and a wife that inherited/”took over” his IRA who is of RBD age.

The client was born on 3/4/1945 (would have turned 70 1/2 on 9/4/2015). He passed away on 1/19/2015.

His wife was born on 8/21/1944 (turned 70 1/2 on 2/21/2015). She did not have a traditional IRA prior to becoming the owner on her deceased husband’s IRA (she was the 100% primary beneficiary).

Had he been alive for the full year, he would have had to start to take an IRA RMD (by 4/1/2016).

Had she had an IRA on 12/31/2014, she would have to take some IRA RMD this year because she would have had a balance on 12/31/14 and would be over 70 1/2 by 12/31/2015.

So, my question is, does she have to take an IRA RMD this year (or by 4/1/16)? Or, because he did not reach his RBD and she had no balance at the end of 2014, there is no IRA RMD required?

To add a little more the the equation. They both take/took monthly distributions. He took out about $3,000. By year end, she will have taken out about $9,000. The total RMD for him would have been about $10,500 and for her (based on her age and his 12/31/2014 account value) it is closer to $11,000.

Thank you.



Submitted by Alan - IRA critic on Thu, 2015-09-03 21:34

  • There is no RMD due for 2015. The decedent was not subject to an RMD because he passed prior to his RBD, and surviving spouse does not have an RMD because she had no IRA balance on 12/31/2014. This is the case whether she rolls the IRA over to her own name in 2015 or maintains an inherited IRA. As for 2016, she will have an RMD either way but it will be much lower if she rolls this over to her own IRA. She might as well do the rollover now since it will not result in an RMD for 2015 and it will result in a lower RMD for 2016 and beyond. Another major reason to do the rollover soon is to assure that HER beneficiary will be treated as a designated beneficiary rather than a successor beneficiary. Her beneficiary named on her inherited IRA would be treated as designated if she were to pass prior to 1/1/2017, but if she maintained the IRA as inherited beyond 2016 and then passed, her beneficiary would be treated as a successor beneficiary and would have a much reduced stretch.
  • Pub 590 B is not real clear on year 70.5 deaths, but the underlying rules are stated on pages 8 and 9. See “Surviving Spouse. Note.” on p 8 and “Owner Died before RBD” on p 9.
  • A confusing point is the RBD date. An IRA RBD date can only be 4/1 of the year following the 70.5 year. However in the posted situation, that date would only apply to the 2015 RMD and there is no 2015 RMD. Therefore, there is no RBD and the 2016 RMD must be taken by 12/31/2016.
  • The $3,000 distribution he took as well as the remainder of his RMD became “unrequired” due to his death prior to his RBD. Her distributions of $9,000 are not RMDs because there is no 2015 RMD whether she rolls it over in 2015 or not. 

Submitted by Jim Shope on Fri, 2015-09-04 13:14

  • Hi Alan, thank you for your thorough answer.  Initially, I thought that she had to take an RMD, but when I read through Pub 590 it made me question whether she even had to take an IRA RMD, and that is why I posted the question.
  • You have confirmed my feelings and I really appreciate the time and effort you took to answer this question.
  • Thank you SO much!

Add new comment

Log in or register to post comments