Original IRA owner dies this year, hadn’t taken RMD. Does Beneficiary need to take the RMD this year or next?
I am a bit confused on when the beneficiary owner would need to take the RMD. If the original owner died in July 2023 and did not take an RMD – does the beneficiary need to take an rmd this year or next year
Permalink Submitted by Alan - IRA critic on Fri, 2023-10-27 19:27
When an IRA owner passes after their RBD and did not complete the year of death RMD, the beneficiary(s) are responsible for doing do. The Secure Act has extended the deadline for the beneficiary from the end of the year of death to the tax filing deadline (including extensions) for that tax year. Therefore, the deadline is 4/15/2024 to take the 2023 year of death RMD. That means that the beneficiary has a choice of which year (2023 or 2024) they want to incur the tax liability.
Permalink Submitted by BruceM on Sun, 2023-10-29 20:12
If the beneficiaries of the decedent’s IRA wants to delay the not-withdrawn RMD amount to 4/15/2024 for the IRA owner’s death in 2023, can the inherited IRAs be created and transferred to another custodian first assuming there are multiple beneficiaires…..or must the RMD amount be withdrawn before the inherited IRAs are created by the beneficiaries?
Permalink Submitted by Alan - IRA critic on Sun, 2023-10-29 21:11
A beneficiary must establish an inherited IRA before any distribution can be made to the beneficiary. Once established, the beneficiary may want to transfer it to a new custodian and the year of death RMD can be completed either before or after the inherited IRA is transferred to a new custodian.