Divorce after 12/31/2023 before IRA RMD – each take 50%
A husband and wife are divorcing. The husband has a large IRA. The wife has no remaining IRA. The husband’s IRA will be split between the two of them before the 2024 IRA RMD. When the IRA RMD is taken out of each IRA, I assume that the ex wife will be taxable on her distribution and the husband will be taxable on his distribution? The husband will not be taxable on the entire distribution. Correct?
Permalink Submitted by Alan - IRA critic on Fri, 2023-12-15 00:28
No. The total RMD is the responsibility of the husband. The wife apparently will have no IRA balance on 12/31/2023, so has no RMD requirement. If this result was not acceptable to the parties, an adjustment should have been made in the divorce settlement. For example, if the husband was required to complete the RMD before the split, the wife would have received less by half the amount of the RMD. Either way, the husband gets the tax bill for the RMD. Note that if wife take a distribution from her share after the transfer incidental to divorce, it will not be credited toward husband’s RMD.