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@libbyandperry - sorry for your loss.
The RMDs get reported in the year the cash is actually distributed - not in the year they represent.
So the 2023 RMD distributed in 2024 goes on the 2025 tax return. Was that RMD large enough to cover the balance of both IRA? The RMD doesn't necessarily have to distribute from each and every IRA.
if there is a 2nd IRA where nothing was distributed in 2023 or 2024, then that has to be distributed and reported as part of the 2025 tax return.
Further, as you have inherited these IRAs, you also have to distribute an RMD (first of the 10 years is 2025) in 2025.
also, HIS RMD's were calculated on HIS remaining life while now they they have been inherited, they are based on YOUR remaining life, so while the RMD is probably a lot less, you must distribute everything in 10 years (2025 through 2034).
Thanks!
To clarify: death was in 2024. Death year (2024) RMD was distributed by inherited IRA 2/2025. Inherited account has only been open a week. Late RMD letter sent by brokerage said we have to request a penalty exemption for the late RMD. (I see conflicting info about this). Do we request this exemption on the taxes I'm in the process of compiling right now for tax year 2024? Or on next year's? Or do we get an automatic penalty exemption? Lastly: Do we have to take another RMD in 2025?
We found out about IRA 2 two days ago. I imagine it will be the same process...
Thanks again!
@libbyandperry same advise:
first, for deaths in 2024, you have until the end of 2025 to take the RMD without penalty, so you are good here. Same for the newly discovered IRA.
And yes, you are required to take the first of your 10 inherited RMDs in 2025. The calculation is based on your life, so the RMD should be a lot lower than what your parent was required to take; however, you must distribute everything by the end of 2034.
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