@NCperson wrote:
@poorchip - maybe I missed whether this part was answered:
<<Is an RMD required in this situation, how is the amount calculated, where is the distribution reported, and who pays the tax on the distribution?>>
1) the 2021 RMD was required and is based on the IRA owner's situation (your father in law).
Take the balance of the IRA as of Dec 31, 2020 and divide by the factor in the table in the link below. Use the BLUE column as that was in effect in 2021.
Look up your father-in-laws age as of his birthday in 2021, even if he died prior to his birthday.
So the number you are going to divide by is going to be 8.1 or 7.6 (96 or 97 years old) depending on his age on his 2021 birthday. That result is the required minimum distribution from 2021.
https://static.fmgsuite.com/media/documents/62a03f4e-4470-466d-ab38-c2d1850bfc7d.pdf
2) that amount needs to be distributed from the IRA in 2022 to the Estate as it is the beneficial owner of the IRA and pay any tax required. Follow @Opus 17 's advise as he makes some very valid points.
3) there is also a 2022 distribution required separate from the 2021 catch-up distribution.
I hate to nitpick and disagree, but if my general interpretation is correct, then:
1. The father-in-law's RMD is calculated differently because, at the time of his death, his sole beneficiary was his spouse who was more than 10 years younger than he was. Follow the instructions on page 8 of this PDF that start with "Sole beneficiary spouse who is more than 10 years younger."
https://www.irs.gov/pub/irs-pdf/p590b.pdf
3. Neither the estate nor the wife (if the IRA is transferred to the wife as beneficiary) has an RMD for 2022. Once the owner has died and because the first beneficiary was the estate, it follows the 5 year rule. There is no annual RMD, but the entire balance must be distributed by December 31 of the year containing the 5th anniversary of the death of the original owner. The corrective RMD that must be taken is the one that was required of the father-in-law while he was alive in 2021. The mother did not have a separate RMD in 2021. And after the mother died, the 5 year rule applies to the estate.
