Inherited IRA RMD question
My client passed away in January 2024. They were about to turn 73 y/o in February 2024.
Their adult daughter is the 100% primary beneficiary of their IRA.
My two questions:
1) Will the daughter need to take an RMD this year prior to transferring the IRA assets into an inherited IRA?
My thinking is no, she does not. Client passed prior to their RBD of April 1, 2025. Thus there is no required distribution for the beneficiary. Whether the deceased account owner planned to take an RMD this year is irrelevant since they had not began withdrawals and passed away prior to the RBD.
2) Will the daughter need to take required distributions from the inherited IRA?
No. Since the account owner passed prior to RBD there is no annual RMD for the beneficiary. The inherited account must be emptied within 10 years.
Any input is appreciated!
Permalink Submitted by Alan - IRA critic on Thu, 2024-02-22 02:33
That’s correct, there is no year of death RMD requirement for deaths prior to RBD. But even if there was a year of death RMD it could only be taken from the inherited IRA after it was established.
Correct. Daughter will have no beneficiary RMDs in years 1-9 of the 10 year rule, but she may want to consider voluntary distributions to avoid a very large taxable distribution in year 10.
Permalink Submitted by David Mertz on Thu, 2024-02-22 02:45
No. There is no RMD for 2024 because the client died before their April 1, 2025 required beginning date for RMDs.
Annual beneficiary RMDs will not be required under the 10-year rule for the same reason.