RMD Question after spouse dies

Submitted by Jack Thomas on Tue, 2016-11-29 15:40

Scenario: wife passes away fall of 2015 and had already taken RMD for 2015. Husband rolls the IRA into his own IRA January 2016 at new custodian. Question: for the 2016 RMD, does the husband get the account value as of Dec. 31, 2015 at previous custodian and then make the calculation based on their (the husband’s) life expectancy? Thanks!



Submitted by Alan - IRA critic on Tue, 2016-11-29 17:44

Did he request that the inherited IRA be changed into his name as owner (assumption of ownership) before taking the distribution?  Makes all the difference. Also, since it is possible to take an RMD prior to reaching the required beginning date, please confirm that wife passed AFTER her RBD.

Submitted by Jack Thomas on Tue, 2016-11-29 19:49

No, the husband did not request the 2016 distribution before changing it into his name in January 2016.  The wife passed after the RBD (wife was in mid seventies when she passed in 2015).  So am I correct in my thinking that the husband takes 2016 RMD based on his life expectancy and the account value as of 12/31/2015 even though the account name was still under the wife’s name on 12/31/2015?

Submitted by Alan - IRA critic on Tue, 2016-11-29 20:14

  • Since he changed the name to his before taking a distribution, his 2016 RMD would be calculated using Table III and the value of the inherited IRA on 12/31/2015.
  • There is another factor here. If he moved the funds to his own IRA by direct trustee transfer there will be no 1099R reporting the transfer. However, if he had a check issued to himself there will be a 1099R reporting a distribution. The portion of that distribution that was his RMD for that account only was not eligible for rollover, but the IRS does not appear to be enforcing the excess IRA contributions (from rolling over RMD money). He would probably be OK just taking his total RMD for the year before year end and reporting the first distribution as a full rollover and the second distribution as his taxable RMD. While this is not technically correct, the IRS does not seem to care as long as the full RMD is distributed by year end and reported.

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