Decedent passing away before taking RMD
For years, if a decedent passed away before satisfying their RMD, the beneficiaries had to do so by 12/31 of the year the decedent passed away. I read something that said something to the effect that the final RMD regulations issued in July 2024 now allow beneficiaries to extend the deadline to 12/31 of the following year or the tax filing deadline for their own tax year that begins in the year of the IRA owner’s death. Is this true, or do my clients children still need to satisfy their father’s RMD by 12/31/25?
Permalink Submitted by Alan - IRA critic on Thu, 2025-09-11 17:17
The deadline is the end of the year following the year of death, and what you read is correct.
However, for a 2025 death of post RBD decedent, the beneficiaries will have to take annual RMDs for years 1-9 of the 10 year rule, and those RMDs start in 2026. Therefore, it may be tax efficient to complete the year of death this year as 2025 will not include any of the beneficiary RMDs.
Finally, note that the year of death can be completed in any combination by the beneficiaries including partially in 2025 and in 2026.
Permalink Submitted by Robert Roselli on Thu, 2025-09-11 17:26
Just so I’m clear (I’m going to make up these numbers), the decedent needed to take $ 100,000 in 2025. He died without taking anything. He has two beneficiaries who need to take $ 50,000 each. The descendant’s IRA will be moved to his two children’s Inherited IRAs. In 2026, both beneficiaries have an RMD of $50,000. They can take 50K each year, $0 in 2025, and $ 100 in 2026, or a combination of some each year, so long as the 2025 + 2026 RMDs are satisfied by 12/31/2026? My client was a post-RBD decedent.
Permalink Submitted by Alan - IRA critic on Thu, 2025-09-11 17:51
The beneficiary RMDs starting in 2026 are likely to be different than the year of death RMD. Each beneficiary RMD will be based on their age in 2026. That beneficiary RMD must be completed by the end of 2026.
The year of death RMD of 100k can be taken in any combination between the two of them, but it will take coordination and communication if they decide not to take out 50k each. The 100k can be taken out in 2025 or 2026 in any combination between the years and the beneficiaries. Each beneficiary may have a different tax profile and might want to defer their share of the 100k to 2026 or not, so there is alot of flexibility to the year of death RMD.
For their own beneficiary RMDs starting in 2026, there is no flexibility other than the option to take out more than the annual RMD, perhaps to prevent a much larger taxable distribution in year 10 (2035).