Year-of-death RMD process
Deceased IRA owner had not taken her RMD before passing away. Children are beneficiaries. Two (maybe three) different financial firms involved in the transfer of funds. Q: what is the order to events? Transfer first, then withdrawal? or vice versa? In other words, which firm will be sending the 1099-death distribution?
Permalink Submitted by Alan - IRA critic on Fri, 2024-10-25 17:02
The firm that makes the distribution. Inherited IRAs must be established before any distribution is made. If all the IRAs had the same beneficiaries and %s, the year of death RMD can be completed in any combination between them and from any inherited IRA. If beneficiaries differ, then it’s more complex.
The beneficiaries can transfer the inherited IRAs into a single inherited IRA for each beneficiary if the parent owned the IRA and the same beneficiary RMD rules apply. The children do not need to each maintain 3 inherited IRA accounts if they inherited 3.
The new deadline for completing the year of death RMD is 12/31 of the year following the year of death.