Inherited IRA
Mother dies in 2016 leaving her IRA to her daughter. IRA is transferred to an inherited IRA in 2017. The custodian issued a check for the 2017 RMD based on daughter’s life expectancy. Daughter never cashed the check and it was voided and remained in the IRA account. Daughter died in January of 2018 without having taken any distributions. The estate has to take the 2017, 2018 and 2019 RMD distributions. Whose life expectancy does it use for each year?
Permalink Submitted by Alan - IRA critic on Wed, 2019-12-18 19:23
The daughter’s life expectancy. Divisor comes from Table I based on daughter’s age at end of 2017. That divisor is then reduced by 1.0 for each year thereafter. The estate will need to file a 5329 for 2018 to request waiver of the excess accumulation penalty, also for 2019 if that RMD is not distributed by year end. The IRS typically does not pursue such penalties from decedent’s, but the estate might consider filing a 5329 on behalf of daughter for 2017 as well.