Pre Secure Act / 2019/ Spousal RMD Question
Situation: Timing of inheriting Deceased Spouses IRA
Spouse passed in 2019. Surviving spouse left IRA as is until 2025. This would have been the deceased spouse’s start of a RMD.
Surviving spouse was a year older and took their own RMD in 2024. Surviving spouse took the IRA in Jan 2025 as their own.
They were told that their own RMD needs to be redone for 2024 and based on the added value of the inherited IRA that they just rolled into their own IRA in 2025. The reason the spouse waited until 2025 was to delay the impact of the RMD on taxes as long as possible since the deceased spouse would have only been 73 in 2025. No penalty will be imposed if they take the added RMD before April 1st but it doesn’t seem correct since the IRA was just rolled into an IRA of their own in 2025. This doesn’t seem right.
If this is incorrect do they have to pay an RMD for the deceased spouse who passed in 2019 since they would have turned 73 in 2025 had they survived.
Thank you for any insights you can offer.
Permalink Submitted by Alan - IRA critic on Thu, 2025-02-13 14:18
A few issues here, and the custodian is incorrect.
Since the deceased spouse would only have been 72 in 2024, there was no 2024 beneficiary RMD required. I assume that the 2024 RMD you refer to is from another IRA that the SS already owned.
If the SS assumed ownership of the inherited IRA in 2025, this has no effect on the 2024 RMD, which does not need to be recalculated. The inherited IRA was not owned at any time in 2024. The value of the inherited IRA on 12/31/2024 determines the 2025 RMD which can now be aggregated with the 2025 RMD for the already owned IRA.
But if the spouse did not assume ownership but instead took a 2025 distribution and rolled it into their own IRA as a 60 day rollover, that distribution included the 2025 beneficiary RMD, and that portion was not eligible for rollover. That would change the outcome in the paragraph above and the inherited IRA RMDs would also have been higher than an owned RMD. As you can see, assumption of ownership is the better way of acquiring ownership of the inherited IRA for multiple reasons including that it is non reportable and does not use up the one rollover allowed over a 12 month period.