RMD for year of death- tax reporting

[Guest Shelton]

If IRA holder is already taking RMD and dies this year without taking this year's RMD, then the RMD must be reported under the tax ID number of the beneficiary.

My question is, since the beneficiary can be determined by 12/31 next year and the RMD has to be taken by 12/31 this year, how do we know who to distribute the assets to, since the beneficiary can change next year?

[BPickerCPA]

Shelton,

The designated beneficiary, the beneficiary upon whose life expectancy the post-death distributions will be based, is determined as of 12/31 of the year after death. However there is still a beneficiary before that date, and that beneficiary takes the year of death RMD.

Be careful, however, that taking the distribution may, according to the IRS, eliminate the possibility of a qualified disclaimer.

Barry

[Guest Shelton]

Thanks Barry

[Bruce Steiner]

Suppose instead the employee had a loan against her account, and after her death the plan satisfied the loan out of the account.

If the beneficiary is taxable on the outstanding loan, does that prevent the beneficiary from taking a lump sum in a subsequent year? (Suppose the employee died before 70 1/2, the beneficiary is the estate, and wants to take a lump sum near the end of the 5 years to use NUA.)