IRS minimum distribution rules for owner in year of death?
Question by freond1: IRS minimum distribution rules for owner in year of death?
I am inheriting a traditional IRA from my deceased 89-year-old mother. Publ. 590 tells me that her MRD is determined as if she lived for the entire year. She was taking monthly payments, and I’m not sure whether they will total enough to satisfy the MRD requirement–I doubt if they will, since the whole year’s payments are generally designed to satisfy the requirements. So what am I supposed to do to satisfy the requirement if she died before all 12 monthly payments are received? It’s too late for her to receive them now. Should I take out the rest of the RMD in cash, and treat it as additional income paid to her on her final tax return, even though that distribution will be made after her death? I’m not sure that makes a lot of sense, but how else can the RMD be achieved? Certainly she can’t face an under-distribution penalty–just about everyone would be in that situation in the year of death if there wasn’t some way to complete the RMD.
For myself, I’m anticipating transferring the IRA to an “inherited IRA” kept in her name, and taking 1/23.5 of the 12/31/2010 value as a RMD in 2011. (I’ll be 62 in 2011, and the Table 1 entry for age 62 is 23.5.) Does that sound like a correct procedure?
Answer by tro
since she died before the year was fulfilled, she had no control over the MRD, therefore report what she did receive and her tax return will also show her date of death–consequences not in either the taxpayer’s or your control
and you will calculate your inherited IRA now based on your information which has a basis as of Dec. 31, 2010 to determine what your MRD should be
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