Multiple IRA benes, satisfying decedent’s RMD
IRA owner Dad, age 77, dies, leaving the account to his two kids 50/50.
Dad had an RMD due for 2019 that he did not take before his death.
Kid #1 decides to stretch.
Kid #2 decides to take a lump sum.
Kid #2’s lump-sum withdrawal satisfies Dad’s 2019 RMD, correct? There is no requirement that the RMD comes pro-rata from each Kid’s separate account, right?
It makes complete sense, but I am having a hard time finding direct “chapter & verse” to cite as back-up.
Permalink Submitted by Alan - IRA critic on Mon, 2019-04-29 23:46
You are correct. Dad’s year of death RMD can be completed by any beneficiary, in any combination. This is grounded in IRS Reg. 1.401(a)(9)-5, QA 4 which states that the year of death RMD must be completed by “a beneficiary” which means any of them. That might even include a charitable beneficiary if named along with individuals, and in such a case the IRS wouldn’t collect any taxes on the IRA owner’s final RMD to that extent that RMD was completed by a charitable beneficiary.