RMD of decedant for 2025 paid to who?
Client inherited an IRA from a good friend (non-relative). Her RMD for 2025 was not taken.
questions:
- The RMD has to be paid out of the IRA prior to client transferring to an inherited IRA, correct?
- Can the RMD for 2025 be made out to the estate so the estate pays the taxes on it?
- If can’t be the estate, does the RMD get payable to the client and then they pay the taxes on it?
- The client has to take their RMD next year as it is one year after the date of death, correct?
- You go by the RMD table factor of inherited IRA’s on the clients age starting in 2025, correct?
Thank you very much.
Douglas
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-10 12:30
The year of death RMD can only be taken after the inherited IRA is created. A distribution is not allowed from the deceased’s IRA before retitling, nor is naming a beneficiary etc. This RMD can only be paid to the beneficiary, who is the one that inherited the account. The estate is not a factor unless there was no beneficiary named. Therefore #2 is not possible and #3 is correct.
The deadline for completing the year of death RMD is now 12/31 of the year following the year of death, therefore 12/31/2025. But it probably makes sense to complete it this year when there is no beneficiary RMD required. Beneficiary RMDs will be required starting in 2026 based on client’s attained age in 2026.
Beneficiary will be an EDB if not more than 10 years younger than decedent. If more than 10 years younger the 10 year rule will apply with annual RMDs in years 1-9 starting in 2026.