POST RMD IRA spouse beneficiary

Submitted by Chris Kimball on Wed, 2023-12-13 23:58

A 73-year-old dies in 2023 before taking RMD from her traditional IRA. Her spouse then tansfers the deceased spouse’s IRA into his own IRA, also during 2023.

1) should a 2023 RMD have been taken from the deceased spouse’s IRA before it was moved into the surviving spouse’s IRA?
2) If so, what can be done to rectify the situation?
3) If not, what amount is used to determine the surviving spouse’s RMD for 2023? Is the 12/31/22 balance of the deceased spouse’s IRA added to the 12/31/23 balance of the surviving spouse’s IRA, and that is the number used to calculate the 2023 RMD for the suriving spouse, or is there just no 2023 RMD required from the deceased spouse’s IRA?

Thanks!



Submitted by Alan - IRA critic on Thu, 2023-12-14 00:30

  1. The 2023 RMD becomes the responsibity of the beneficiary, but the spouse can satisfy it either from the inherited IRA or from their own IRA after assuming ownership. However, if the spouse actually took a distribution from the inherited IRA, that includes the RMD and that portion could not be rolled over. In other words, it depends on whether the spouse took a distribution or assumed ownership by transfer.
  2. If a distribution was taken and entirely rolled over, the year of death RMD has been completed, but the RMD amount not eligible for rollover becomes an excess contribution to the IRA. If ownership was done by assumption of ownership (no distribution), then the RMD must come out of the owned IRA created by assumption of ownership. IRS does not care, as long as the RMD is distributed to the surviving spouse.
  3. The 2023 RMD is that of the deceased spouse calculated from the 12/31/2022 IRA balance. The 2024 RMD for the surviving spouse (if RMD age) is based on the 12/31/2023 IRA balance. 
  4. The deadline for the beneficiary to complete the year of death RMD has been extended from year end to the due date for the 2023 return including extensions.

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