RMD

Submitted by Wendy Mommaerts on Thu, 2015-12-03 15:12

Client inherited IRA funds from her husband in April 2015. Husband passed away March 2015 at the age of 69. Spouse moved these funds into her own IRA and has turned 70 1/2 in September of 2015.

Will our client have to satisfy a 2015 RMD?



Submitted by Alan - IRA critic on Thu, 2015-12-03 16:24

Not unless she had an IRA balance of her own on 12/31/2014 in an IRA she owned all along.  In other words, there will be no RMD due at all for 2015 for the balance she inherited.

Submitted by Wendy Mommaerts on Thu, 2015-12-03 17:11

So the answer I received from our custodian is then incorrect….they are stating that since the spouse inherited the IRA and is treating as her own IRA during the year in which the spouse turns 70 1/2, the spouse will need to satisfy an RMD in 2015.

Submitted by Alan - IRA critic on Thu, 2015-12-03 18:29

They are incorrect. When an IRA owner passes PRIOR TO the required beginning date, there is no year of death RMD. Refer them to IRS Pub 590 B, p 8. Applicable provision below:　

 Distributions in the year of the owner’s death. The re-quired minimum distribution for the year of the owner’s death depends on whether the owner died before the re-quired beginning date, defined earlier. If the owner died before the required beginning date, there is no required minimum distribution in the year of the owner’s death. For years after the year of the owner’s death, see Owner Died Before

 

Submitted by David Mertz on Thu, 2015-12-03 19:10

Also, CFR 1.408-8 Q&A-5 includes the following regarding a suviving spouse choosing to treat the IRA as his or her own:

However, if the election is made in the calendar year containing the IRA owner’s death, the spouse is not required to take a required minimum distribution as the IRA owner for that calendar year.

In this case it means that there is no RMD that was not satisified by the deceased spouse, as Alan said, nor is there a requirement for the surviving spouse to take an RMD as owner.

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