Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Ask the Experts about the new tax laws! >> Event happening TODAY!
cancel
Showing results for 
Search instead for 
Did you mean: 
petecatliz
New Member

If my 77 yr brother passed had a ira & did not take his rmd. I was his sole beneficiary could i defer taking the rmd till next year or do I have to take it this year?

good afternoon! my question is my brother passed away july 2017 he was 77 years old had a ira and did not take his rmd. I was his sole beneficiary who is 69 years old. I was told by two people that i could defer taking the rmd till next year and two people said I have to take his rmd this year. Who is correct?

1 Best answer

Accepted Solutions
dmertz
Level 15

If my 77 yr brother passed had a ira & did not take his rmd. I was his sole beneficiary could i defer taking the rmd till next year or do I have to take it this year?

The people who told you that you can wait until next year are confusing your brother's RMD requirement with your own beneficiary RMD requirement.  As sole beneficiary, you are responsible for completing any portion of your brother's 2017 that your brother had not yet satisfied.  The deadline for completing his 2017 RMD is December 31, 2017.  If not completed by that date, you can still complete his RMD late and file 2017 Form 5329 to request a waiver of the 50% excess accumulation penalty you would otherwise have to pay, but it's much simpler to just complete the RMD by the end of this year.

In 2018 you must begin taking beneficiary RMDs based on your life expectancy in 2018.  If you will be age 70 on your birthday in 2018, your life-expectancy from the the Single Life Expectancy table (Table 1) for use by beneficiaries will be 17 and your RMD will be the 2017 year end-balance divided by 17.  You'll reduce the 17 by 1 each subsequent after 2018 and use that and the previous year's year-end balance to determine the RMD for the subsequent year.  (Note that if you end up completing your brother's year-of-death RMD late, you'll have a higher 2017 year-end balance in the inherited IRA on which to calculate you 2018 beneficiary RMD, resulting in you being required to take out more in 2018 than you would have to if your brother's RMD is completed by the December 31, 2017 deadline.)

Given how close we are to the deadline, you should probably initiate the distribution now.  Custodians can sometimes have a delay in processing the request.

View solution in original post

1 Reply
dmertz
Level 15

If my 77 yr brother passed had a ira & did not take his rmd. I was his sole beneficiary could i defer taking the rmd till next year or do I have to take it this year?

The people who told you that you can wait until next year are confusing your brother's RMD requirement with your own beneficiary RMD requirement.  As sole beneficiary, you are responsible for completing any portion of your brother's 2017 that your brother had not yet satisfied.  The deadline for completing his 2017 RMD is December 31, 2017.  If not completed by that date, you can still complete his RMD late and file 2017 Form 5329 to request a waiver of the 50% excess accumulation penalty you would otherwise have to pay, but it's much simpler to just complete the RMD by the end of this year.

In 2018 you must begin taking beneficiary RMDs based on your life expectancy in 2018.  If you will be age 70 on your birthday in 2018, your life-expectancy from the the Single Life Expectancy table (Table 1) for use by beneficiaries will be 17 and your RMD will be the 2017 year end-balance divided by 17.  You'll reduce the 17 by 1 each subsequent after 2018 and use that and the previous year's year-end balance to determine the RMD for the subsequent year.  (Note that if you end up completing your brother's year-of-death RMD late, you'll have a higher 2017 year-end balance in the inherited IRA on which to calculate you 2018 beneficiary RMD, resulting in you being required to take out more in 2018 than you would have to if your brother's RMD is completed by the December 31, 2017 deadline.)

Given how close we are to the deadline, you should probably initiate the distribution now.  Custodians can sometimes have a delay in processing the request.

Dynamic AdsDynamic Ads
Privacy Settings
v