RMD deadline
Year-of-Death RMD for Beneficiaries
If the owner was required to take an RMD and had not finished it before death, the beneficiary generally must distribute the remaining year-of-death amount by December 31.
What to know first
- First determine whether the owner had an RMD obligation for the year of death.
- Subtract distributions the owner took before death from the full required amount.
- The remaining amount is generally paid to the beneficiary by December 31.
- The year-of-death RMD is separate from the beneficiary’s later distribution schedule.
Calculate the unfinished amount
Start with the owner’s year-end balance from the prior year and the life-expectancy factor that applied to the owner. The custodian may already have calculated the annual RMD.
Subtract eligible distributions made before death. A rollover does not satisfy an RMD. If multiple IRAs are involved, obtain records for every distribution before deciding that the obligation is complete.
Reporting and the next calendar year
The beneficiary who receives the remaining distribution generally reports the taxable amount as income. The custodian reports the payment on Form 1099-R.
The following year starts the beneficiary’s own inherited-account schedule. That may be annual life-expectancy payments, annual RMDs plus the 10-year deadline, or only the 10-year deadline.
Model your inherited IRA deadline
Use the inherited IRA calculator to compare the 10-year rule, annual beneficiary RMDs, and eligible designated beneficiary schedules.
Open the inherited IRA calculatorFrequently asked questions
Is the year-of-death RMD part of the 10-year rule?
No. It finishes the owner’s existing annual obligation. The beneficiary’s 10-year or life-expectancy schedule begins separately.
What if there are several beneficiaries?
Beneficiaries should coordinate with the custodian and tax adviser because payments and reporting can depend on account division and who receives the distribution.
Sources
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