RMD for year of decedent’s death
Client who was already taking RMDs died in late October. Her annual RMD, which was scheduled for Nov 1st and processed by Fund company, was received in the mail as a check after passing. Should the beneficiary (who is also the executor) return the RMD check to Fund company first and create an Inherited IRA? Or can the bene/executor deposit the check into the estate checking account and have that count as being distributed?
Permalink Submitted by Alan - IRA critic on Mon, 2023-11-27 20:55
The check should technically be returned to be reissued to the beneficiary and the beneficiary would then receive the 1099R. Left as is the 1099R will probably be issued to the decedent and taxed on the decedent’s final return or the executor could nominee such a 1099R to the beneficiary. If the executor will inherit the funds either way and there is no other estate beneficiary to complain, the executor could handle it either way. This is a frequent issue with scheduled distributions that cannot be stopped in time after the IRA owner’s death.