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April 13, 2022
Question

Not sure how to answer the RMD question?

  • April 13, 2022
  • 1 reply
  • 0 views

I have a clear understanding of what an RMD. But TurboTax is asking if my 2021 distribution from my beneficiary IRA was an RMD. My grandfather died early 2021 and had not taken his RMD yet, so it was left to the beneficiaries. I do not know what kind of 2021 distributions the other beneficiaries have taken from their bene IRAs but was told it was enough to cover my grandfathers 2021 RMD. However, I know I don't have RMDs with my bene IRA because it is no longer life expectancy based, due to new tax laws. I have to deplete the bene IRA within 10 years, so my distributions can be as much as I want within the 10 year span. So, "was my withdrawal an RMD"?

1 reply

macuser_22
Employee
April 13, 2022

It depends:  A RMD might be required depending on the terms of the IRA AND if you are more then 10 years younger than the deceased IRA owner.

 

If not, then say it was not a RMD or RMD not required.

 

Per IRS Pub 590B

https://www.irs.gov/pub/irs-pdf/p590b.pdf

 

Individual designated beneficiaries. The terms of
most IRAs require individual designated beneficiaries,
who are eligible designated beneficiaries, to take required
minimum distributions using the life expectancy rules (explained
later) unless such beneficiaries elect to take distributions
using the 5-year rule or the 10-year rule, whichever
rule applies. The deadline for making this election is
December 31 of the year the beneficiary must take the
first required distribution using his or her life expectancy
(or December 31 of the year containing the 5th anniversary
(or, for a surviving spouse, December 31 of the 10th
anniversary for the 10-year rule) of the owner’s death, if
earlier).
If the individual designated beneficiary is not an eligible
designated beneficiary, the beneficiary is required to fully
distribute the IRA by the 10th anniversary of the owner's
death under the 10-year rule.

 

Eligible designated beneficiaries. An IRA beneficiary
is an eligible designated beneficiary if the beneficiary is
the owner's surviving spouse, the owner's minor child, a
disabled individual, a chronically ill individual, or any other
individual who is not more than 10 years younger than the
IRA owner.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**