IRA owner dies before April 1st

Submitted by Robert Vashko on Mon, 2023-03-20 22:17

I think I know the answer to this one, but suppose IRA owner turned 72 in 2022.

Their first RMD is due by April 1, 2023.

But they die on March 14, 2023. 2022 RMD had not been taken yet.

Since they did not live to see their RBD of April 1st, their benes do not have to take the 2022 RMD for the decedent, do they?

Permalink Submitted by Alan - IRA critic on Tue, 2023-03-21 00:48

You are correct, they do not have to take a 2022 RMD or a 2023 year of death RMD for the decedent.

Permalink Submitted by Robert Vashko on Tue, 2023-03-21 01:50

No 2023 RMD because benes who inherit before the owner reached RBD never take a stretch RMD in year of death. Am I following you correctly?

Permalink Submitted by Alan - IRA critic on Tue, 2023-03-21 15:08

Yes. Per IRS Reg 1.401(a)(9)-5 QA 4 as copied below, the following specifies a year of death RMD only if the owner passed on or after their RBD. If owner passes prior to RBD, there is no year of death RMD and beneficiary RMDs (if LE applies) begin in the year following the year of death. Therefore, passing in the first 3 months of the RBD year eliminates an owner’s RMD for both the prior year and the year of death.
” If an employee dies on or after the required beginning date, the distribution period applicable for calculating the amount that must be distributed during the distribution calendar year that includes the employee‘s death is determined as if the employee had lived throughout that year. 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.”