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  • 1.  DECEDENT IRA, HOW TO TAKE THE RMD IN YEAR OF DEATH

    Platinum Most Valuable Member
    Posted 10-18-2022 08:29 AM
    Trying to determine if IRA plan custodian is taking correct approach here.

    Custodian recommends rolling over the decedent IRA to the beneficiary's IRA then taking the RMD from the beneficiary's IRA.

    I don't believe that follows IRS guidance. 

    Mike Jaffe

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    Michael Jaffe
    CPA
    MICHAEL B. JAFFE, CPA PC
    Commack NY
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  • 2.  RE: DECEDENT IRA, HOW TO TAKE THE RMD IN YEAR OF DEATH

    Silver Most Valuable Member
    Posted 10-19-2022 05:31 AM
    No. The custodian is correct. No distributions are allowed from the decedent's IRA. It should be taken from the beneficiary IRA. If the beneficiary is a spouse , you may prefer to roll into the spouse's IRA before taking the distribution, depending on the circumstances.

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    Peter Hall
    HALL CPA GROUP
    Kings Park NY
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  • 3.  RE: DECEDENT IRA, HOW TO TAKE THE RMD IN YEAR OF DEATH

    Silver Most Valuable Member
    Posted 10-19-2022 07:59 AM
    There is a difference between a recommendation and a rule.  Too often, the financial advisor will do what is easiest for them.

    I have always told the beneficiary to take the RMD from the decedent's IRA directly, when the full RMD for the year was not taken before the date of death.  Once that is done, you can set up the beneficiary IRA and follow the applicable RMD rules going forward.

    My concern is that many financial advisors do not understand the RMD rules.  That includes making sure the current year RMD is taken care of.  I am also concerned with proper 1099R reporting.  Lastly, often there are multiple IRA accounts and the custodian/advisor may not know what the full RMD is and whether it was taken out prior to death since they have no knowledge of the accounts they don't control.  Therefore, a careful analysis must be done to make that determination.


    --
    Larry Prosky CPA
    Prosky & Rosenfeld LLP CPAs

    1025 Old Country Road
    Suite 403 W
    Westbury, NY 11590
    Direct: 516-873-9600 x1
    Fax: 516-873-9602
    Cell: 516-785-5658 or 516-661-6020
    e-mail: larry@prcpallp.com


    Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.  If desired, Prosky & Rosenfeld LLP CPAs would be pleased to perform the required research and provide you with a detailed written analysis.  Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.  


    Privileged and confidential-this communication and any accompanying documents are confidential and privileged.  They are  intended for the sole use of the addressee.  If you receive this transmission in error, you are advised that any disclosure, copying, distribution or the taking of any action in reliance upon this communication is strictly prohibited.  Moreover, any such disclosure shall not compromise or waive the accountant-client, or other privileges, as to this communication or otherwise.  If you have received this communication in error, please contact me at the above e-mail address.  Thank you.
     





  • 4.  RE: DECEDENT IRA, HOW TO TAKE THE RMD IN YEAR OF DEATH

    Silver Most Valuable Member
    Posted 10-20-2022 08:16 AM
    attached is an article by Ed Slott, considered to be an expert in this field.  


    Ed states (paragraph 3)  that the RMD for the year of death can be taken directly from decedent IRA or from an iinherited IRA, often dictated by the rules of the custodian.  

    again, i think it can be done either way, but i have found that taking it from decedent's IRA directly, then moving it to the inherited IRA, makes it simpler going forward.
    --
    Larry Prosky CPA
    Prosky & Rosenfeld LLP CPAs

    1025 Old Country Road
    Suite 403 W
    Westbury, NY 11590
    Direct: 516-873-9600 x1
    Fax: 516-873-9602
    Cell: 516-785-5658 or 516-661-6020
    e-mail: larry@prcpallp.com


    Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.  If desired, Prosky & Rosenfeld LLP CPAs would be pleased to perform the required research and provide you with a detailed written analysis.  Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.  


    Privileged and confidential-this communication and any accompanying documents are confidential and privileged.  They are  intended for the sole use of the addressee.  If you receive this transmission in error, you are advised that any disclosure, copying, distribution or the taking of any action in reliance upon this communication is strictly prohibited.  Moreover, any such disclosure shall not compromise or waive the accountant-client, or other privileges, as to this communication or otherwise.  If you have received this communication in error, please contact me at the above e-mail address.  Thank you.
     





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The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.