Apportioning Year-of-Death RMD amongst beneficiaries

Submitted by Jeffry White on Sun, 2022-12-11 16:40

This statement appears in multiple posts within the forum:

“If there are multiple IRA beneficiaries, the IRS does not care WHO takes the year-of-death RMD, the IRS just wants it to be taken. If multiple beneficiaries elect to divide the year-of-death RMD equally, they can do so. If one beneficiary chooses a lump sum payout, that could satisfy the entire year-of death RMD (if the lump sum is large enough). “

Could you point me to the authoritative source for this please? I am one of three beneficiaries of an IRA following the 2022 death of my father. He was 85. One beneficiary took a lump sum of his share of the IRA, and it exceeds my father’s RMD for 2022.

Also, how do I document and/or report that the RMD for 2022 was satisfied by my brother’s lump sum distribution?

Thank you!



Submitted by Alan - IRA critic on Sun, 2022-12-11 19:12

  • The consensus regarding aggregation of the year of death RMD among beneficiaries is derived from IRS Reg 1.401(a)(9)-5 QA 4 which states that the RMD must be completed by “a beneficiary”, meaning any beneficiary. Applicable sentence copied below:
  • “Thus, a minimum required distribution, determined as if the employee had lived throughout that year, is required for the year of the employee‘s death and that amount must be distributed to a beneficiary to the extent it has not already been distributed to the employee.”
  • In your situation, you do not need to withdraw what would have been your share of the year of death RMD.
  • You do not have to document this, nor does he. Like any RMD, the IRS will look for the 1099R reporting the distribution, although that 1099R also does not distinguish RMDs from non RMD distributions or RMDs for different years by year. 
  • Your situation also requires cooperation and communication between beneficiaries. If you suspect your brother might not have taken this distribution, then you should take out your share. Apparently, the IRS would not penalize you for not covering for other beneficiaries, meaning if you took out your share, and the others did not take any distributions, the IRS would not penalize you for not taking out the full amount. 
  • Proposed Secure Act regs also extend the deadline from year end of the RMD year to the due date plus extensions for that year with respect to the year of death RMD. 
  • Suggest you just document in your records the amount of the RMD that was not completed, and the name of the brother that satisfied the full requirement. The IRS rarely inquires about this.

Submitted by Jeffry White on Sun, 2022-12-11 21:08

  • You do not have to document this, nor does he. Like any RMD, the IRS will  look for the 1099R reporting the distribution, although that 1099R also does not distinguish RMDs from non RMD distributions or RMDs for different years by year.

Thank you, very much.  The analysis of the language of the Reg makes sense to me.  I do have an additional question raised by the language I’ve underlined in your quote above. If the IRS will “look for the 1099R” reporting a distribution of my father’s RMD for 2022, how is it that they FIND the distribution based on the 1099R my brother will receive for his lump sum distribution of his entire share of the IRA? I’m comfortable my brother has in fact taken a lump sum on the account, and I’m sure he’ll provide me a copy of his 1099R for my records.  Even so, I’m not familiar with the mechanism by which the IRS would FIND the distribution corresponding to my father’s account which was taken from an inherited IRA owned by my brother. Thanks, again.  I appreciate the input very much.

Submitted by Alan - IRA critic on Sun, 2022-12-11 22:45

good question, considering that there is no IRS required reporting for RMDs of decedents, so there is even less control there than for the RMDs of beneficiaries. The IRS has data on beneficiaries through Form 5498 filed each year by the custodian for beneficiaries that hold beneficiary RMDs. However, in cases like your brother who takes a lump sum distribution in year 1, there is no 5498 requirement. Therefore, if the IRA was large enough, and the decedent’s final return did not report a distribution large enough to meet their RMD, I suspect that the IRS would have to contact the IRA custodian who held the owner’s IRA and set up inherited IRA account for the beneficiaries, and ask the custodians for the SSNs of these beneficiaries. The IRS could then check the beneficiary tax records to determine if there was a 1099R issued reporting the distribution. If not, the IRS could contact these beneficiaries or audit them. Again, this is what the IRS could do if they wanted to, however for the most part, they don’t bother. IRS enforcement of RMDs leans mostly on custodians to pursue enforcement of RMD requirements, and custodians do a better job for owner RMDs than beneficiaries. Year of death RMDs involve reconciling both the pre death owner distributions with the post death beneficiary distributions. 

Submitted by Jeffry White on Mon, 2022-12-12 13:19

Well, first let me thank you once again for this information.  Then, let me just say that my mouth fell wide open when I read your response to my question about how the IRS would find the information about my brother’s lump sum withdrawal, etc.  I read it aloud to my wife (who knows nothing about taxes, and the like) and she laughed out loud – how could we have rules so riduclously complicated with no capacity to enforce?  Rhetorical, I suppose, but seriously idiotic. Thanks, again!  I’m not going to take the RMD from my beneficiary account, secure a copy of my brother’s 1099R, and sleep well.

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