Client dies at 75 and had not yet taken their full RMD distribution for the year. Beneficiary is a non spouse; I know the RMD is taxable and payable to the beneficiary. Does the remaining RMD amount have to be removed before or after the assets are moved to a beneficial IRA account.

Thank You.

The current year RMD is supposed to be removed from the account before the funds are placed in a beneficiary account. The custodian should do this if you ask for a movement of funds, but these rules sometimes are missed.

Mary Kay,

It is not the movement we should be concerned with, but the end result of the transaction.

denisedawson,


To determine the answer to your question, you must know the outcome of the actions taken by the processor. You have correctly stated that the RMD for the deceased must be reported under the tax ID number of the beneficiary. To effect this tax reporting properly, some practitioners require the funds to be transferred to the beneficiary IRA, because if the distribution is processed from the decease’s IRA, it will be reported under the decease’s social security number.

Don’t get hung up on ‘from which account’ as this is just an administrative action- focus on, under whose tax ID number will the distributed be reported.