RMDs
A person dies at age 78 and had taken some RMDs for this year but not all of them. The deceased, predeceased her spouse, had no children, and the beneficiaries from various IRAs are charities and siblings. If it were only siblings, prior to moving the IRAs to inherited IRAs, I believe the RMDs would have to be taken by the beneficiaries and then the accounts could be moved to inherited IRAs. Is this correct? Furthermore, could the distributions to charities, if done in 2019, be counted toward her RMDs for 2019?
Permalink Submitted by Alan - IRA critic on Tue, 2019-07-23 23:12
Yes, any distributions this year regardless of to whom will count toward the year of death RMD of the decedent.However, in order to take a distribution, the inherited IRA will have to be retitled to individual separate inherited IRA accounts for at least the individual beneficiaries and any distributions taken from the new account.
Permalink Submitted by Anthony Zalesky on Wed, 2019-07-24 16:13
The deceased currently has beneficiaries of two charities and three individuals. The death benefits payable to the charities, greatly exceed the deceased’s RMDs for this year. If beneficiary payments are made from the IRA to the charities, does this count for RMDs for this year?
Permalink Submitted by Alan - IRA critic on Wed, 2019-07-24 16:33
Yes. The IRS Regs state that the year of death RMD not completed by the owner before passing, must be distributed “to a beneficiary”. It is not limited to a designated beneficiary. Therefore, it can be paid to a charitable beneficiary (tax free to beneficiary), and the individuals do not have to receive any portion of the year of death RMD.