RMD from an assumed account
My brother-in-law died recently at age 72. He had not taken his IRA RMD for 2016. His IRA was assumed by his wife of 72 into her IRA.
Can his RMD for 2016 be taken from the wife’s IRA or does the custodian need to move the RMD amount back to the husband’s IRA and distribute the RMD from there?
Permalink Submitted by Alan - IRA critic on Thu, 2016-05-05 17:49
Was it assumed by direct transfer or as a reportable rollover? Did he pass in 2016 or 2017 and which year was the transfer or rollover done?
Permalink Submitted by Rockey Tripodi on Tue, 2016-05-10 14:14
He passed March 2016. His IRA was assumed into wife’s IRA in May, 2016 directly by Vanguard, where all IRA accounts were maintained. In your 2 choices of direct transfer or rollover, I guess direct transfer. Vanguard calls it an assumption. VG had frozen the deceased account as soon as they learned of his passing, so we could not do the 2016 RMD from his account online, where all transactions are normally done. VG says we have till Dec 31, 2016 to take the RMD, but I wonder if that can be done from the assumed account and how it would show on the various 1099’s.
Permalink Submitted by Alan - IRA critic on Tue, 2016-05-10 20:40
The inherited IRA was transferred into her name by direct transfer, so there has been no distribution which would have included the RMD. His year of death RMD can therefore be taken from the assumed IRA anytime before year end 2016. (sorry for confusion with earlier question- I meant 2015 or 2016 instead of 2016 or 2017). The 1099R will look like any other distribution and will combine all her distributions including her own RMD for 2016.
Permalink Submitted by Rockey Tripodi on Tue, 2016-05-17 11:39
I finally got back to your response. Thanks so for your effort.I have projected the widow’s taxes with the assumed RMD and told her to consider donating some of the RMD to charity to lower her taxes.Once again, thanks.