IRA Updates

Submitted by Robert Wright on Mon, 2019-11-04 18:58

In this month;s IRA Update by Sarah Brenner, JD, IRA Analyst, she states in item #3:

There are always questions that come up as to the correct way to handle the required minimum distribution (RMD) for the year of death of the IRA owner. Here are three things you need to know about the year of death RMD.

Example: Audrey, age 75, dies in 2019. The year of death RMD that must be taken from her IRA will be calculated using the factor that corresponds to age 75 on the Uniform Lifetime Table (22.9).

3. The beneficiary must take the year of death RMD. This is an area of great confusion! If the year of death RMD was not already taken by the IRA owner, it must be taken by the beneficiary. It is not paid to the IRA owner’s estate unless the estate is named as the beneficiary.

Example: Carl, age 85, dies in 2019 without taking his 2019 RMD. His son, Jaden, is his beneficiary. Jaden, as the beneficiary of Carl’s IRA, must take the 2019 RMD that Carl did not take prior to his death. The RMD should not be paid to Carl’s estate.

My question is: Is a spousal beneficiary treated just the same as a non-spousal beneficiary in this situation? i.e. A spousal beneficiary would complete the RMD for the deceased IRA owner and then the spousal beneficiary would start their own RMD in the year following the year of death if the spousal beneficiary did a spousal rollover?

Thank you for your help.



Submitted by Alan - IRA critic on Mon, 2019-11-04 22:38

  • Yes, that is correct. The year of death RMD if the decedent passed on or after the RBD is the RMD that the decedent would have taken. Many times the beneficiary is late determining the amount they need to withdraw for several reasons. In those cases, the IRS will waive the penalty for being late if the beneficiary files a correctly completed 5329 for the year of death indicating the “reasonable cause”.
  • If there were multiple beneficiaries, the year of death RMD is a joint responsibility of all beneficiaries. This does not have be pro rated between them. Beneficiaries are not responsible for RMD delinquencies other than just the year of death.
  • The surviving spouse inherits the remaining IRA basis and adds it to their own IRA by adding it on line 2 of Form 8606 the next year in which an 8606 would otherwise be filed.
  • The best way to do a spousal rollover if the spouse is the sole beneficiary is to first elect ownership and then do a non reportable transfer to their own IRA.

Submitted by Robert Wright on Mon, 2019-11-04 22:58

As always.Thanks for your help.

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