Inherited IRA RMD Ruled for Spouse

Submitted by Charlie Pesiridis on Mon, 2023-10-09 14:07

Hello. A spouse under the RMD age rules inherits the husband’s IRA. The husband took RMDs when the account was transferred to a beneficiary IRA. Now, a beneficiary IRA for the spouse not of RMD age, what are the RMD requirements and options? Did the rules change? Best, CP Thank you in advance.



Submitted by Alan - IRA critic on Mon, 2023-10-09 15:09

  • The rules are the same except for one new Secure Act provision. If the deceased spouse passes after their RBD, the RMD for that year must be completed by the decedent prior to death or by the beneficiary spouse post death but prior to the tax filing date. Beneficiary RMDs for the surviving spouse would begin the following year, but if the surviving spouse elects to assume ownership anytime in that following year they are treated as owning the IRA for the entire year, thus eliminating the beneficiary RMD for that year. Further, if the surviving spouse failed to either take the RMD or elect ownership they would become the owner by default. The surviving spouse should usually NOT elect ownership if under 59.5 to avoid paying a penalty on early distributions.
  • A new Secure Act rule places a time limit on electing ownership or defaulting to ownership. This new time limit is the later of the end of the year following the year of the deceased spouse’s death or the end of the year the surviving spouse reaches RMD age. After that deadline, the surviving spouse cannot assume ownership but can attain ownership by a distribution and a rollover of the amount of that distribution that exceeds the beneficiary RMD for that year. Therefore, surviving spouses should assume ownership before this deadline passes, since that method is more beneficial, reduces the RMD for that year and avoids reporting a distribution and exposure to the one rollover limitation.

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