This post has been closed and is not open for comments or answers.

RMD On IRA In Year Of Death

I am the executor for a friend who died in 2011. He was 87 years old and had a small Traditional IRA ($7500). He had been taking RMD's for a number of years.

Following his death I closed the IRA and had the funds transferred to the beneficary (non spouse).

Will this subject him to the 50% penalty for not taking an RMD prior to the distribution or does the distribution itself amount to an RMD??
    The Slott Report at has a comprehensive answer about year of death RMD's:

    Required minimum distributions (RMDs) start at age 70 ½ for all traditional IRA owners, including those who have SEP and SIMPLE IRAs set up through their employers - even if they are still working for those employers at the time.

    In only the first year you are required to take distributions, you can defer the distribution until April 1 of the following year. This is your required beginning date (RBD).

    If you die before your RBD, then there is no required distribution for your year of death - even if you already took part of the distribution before you die. Your spouse or other beneficiaries are not required to take any further funds out of the IRA to satisfy your distribution in the year of death. If the beneficiaries do not need the money, then let it stay in the IRA to continue growing and compounding tax deferred until they need to begin taking their own RMDs from the inherited account (12/31 of the following year).

    But, if you die after the RBD and have not taken your entire RMD for the year, then your beneficiaries must take the balance of the RMD before the end of the year. The RMD for the year of death is calculated as you had lived for the entire year.

    It is important that your beneficiaries know to take this distribution. The penalty for not taking a required distribution is 50%; that is not a typo; it is 50% of the amount not taken. But wait, there’s more! The amount of the missed distribution must be taken from the account and the beneficiary must pay income tax on that amount in addition to the penalty.


    So, no the distribution to the beneficiary does not amount to an RMD.  If the RMD has not been taken in the year of death then the beneficiaries must take it.

    Tom Young
    • This wasn't an IRA Transfer, it was a complete distribution of the assets. I.E. Seems like there is no longer an IRA if the IRA account was closed and the assets were distributed to the beneficiary. Wondering if the owner of the IRA won't get a 1099 noting the closure of the account, therefore the tax must be paid by the owner?? Thoughts??
    • Ah... didn't pick up on the fact that it wasn't  transferred into the beneficiary's IRA.  The  key here is that a taxable distribution that was as great as or greater than the RMD was done in the year of death.

      Tom Young
    • i took the total rmd for my deceased wife and myself out of my account is this ok
    • Update to my original question...
      I was concerned that the bank had not issued a 1099-R for the 87 year old friend.  The bank told me that there wouldn't be a 1099-R.

      A few days ago a 1099-R for the beneficiary arrived. It shows the transfer was a Total Distribution with the Gross amount and the Taxable amount equal to the account balance on the date of the transfer.

      Based on this, I am assuming there is no concern as to a penalty for the original owner.

      Comments welcome...

    • As long as the total distribution of the account happened in the year of death, then the distribution will satisfy the RMD for the year of death.  Any distribution is counted as coming first from the RMD.  Since your distribution was a taxable distribution (1099-R) and not a transfer to an inherited IRA, it would qualify as the RMD if taken by Dec 31 of the year of death.
    • Agree with pat; IRS validation: