Inherited IRA non-qualified beneficiary RMD question

[lcooksey1]

I received an inherited IRA in Feb 2024 from the estate for my cousin, David.  David passed away at the age of 73 in July of 2023.

According to TurboTax Deluxe 2024, screenshot below, David should have made an RMD withdrawal in 2024, after he was already dead. The "withdrawal" was made by me, after I inherited the IRA. This withdrawal closed the inherited IRA account, so I selected No.  

Do I need to talk to the executor of the estate to see if they took out an RMD when filing David's 2023 taxes?

If they didn't, are all of the non-qualified beneficiaries liable for paying the 2023 RMD? There were several of us. 

[KrisD15 · Accepted solution]

No, you don't need to speak with the executor. 

RMD is Required Minimum Distribution. 

It is not something you have to pay, it is a required amount an account holder must take as a withdrawal per year after a certain age. NOT taking a RMD could cause a penalty

The rules concerning inherited IRA's have recently changed and now Beneficiaries also must take yearly RMD on the inherited IRA. The rule started for 2024, but was pushed back and now will be enforced starting in tax year 2025. You are "Technically" under the old rule of depleting the account within 10 years. I assume the software was changed to reflect the change in the tax law without knowing the IRS would waive the requirement for 2024. 

Select "Yes" since you closed the account which would be recognized as a RMD. This really has no impact one way or the other for Tax Year 2024 since the IRS is waving enforcement, but since you closed the account, select Yes, RMD and you're covered no matter what. 

IRS Inherited IRA

NOTE: For your particular situation, I want to add that since you closed the account, the distribution will be taxable. 

The issue of reporting the Required Minimum Distribution doesn't change anything as far as the tax on the total distribution. 

Reporting that it was all RMD means you won't worry about a penalty, but you still will be taxed, so if this is split between siblings, you might want to have them pitch in for their share of the tax. Since the 1099-R was issued in your name, you'll be liable for the tax on your tax return. 

[Edited 02/16/2025 I 10:38am PST]

@lcooksey1 

[lcooksey1]

I checked Yes, some or all of this withdrawal was an RMD.

That added to the screen the question, Tell us how much of the (total amount) I received applies to the RMD that needed to be taken out. I selected All of this distribution was an RMD.

The next screen wants me to enter in my total RMD for 2024. I entered $0, and it took that answer and went back to the 1099-R entries screen.

Is that OK?

[MarilynG1]

Enter the total amount of the distribution as the RMD amount, so as not to incur a penalty for not taking the Required RMD.  You could enter an amount less than the total distribution (but not $0), but since you don't know what the required RMD amount is, just indicate that it is all RMD to be on the safe side.

@lcooksey1 

[fanfare]

Taking the entirety of the account must satisfy the RMD, whatever it was.

You satisfied both RMDs, the owner's and yours.

@lcooksey1