Personal Investments • Surviving Spouse - Owner or Beneficiary of IRA

As it was explained to me, the Key Word in Sec 327 is "Assume" the Inherited IRA --

Effectively, Sec 327 improves the RMD situation for such beneficiaries. And the Surviving Spouse can still at any time elect to assume ownership of the IRA as before.

Only one RMD required in year owner dies and SS assumes ownership, right? Eg, owner takes his RMD in Jan and dies in March. SS (past RBD) assumes ownership in July. SS takes first RMD during following year or by April 15 of next year.

Almost. The RMD for the surviving spouse (if required) for years after the year of death is due by 12/31 of that year or in some cases by 4/1 of the following year. That RMD might be a beneficiary RMD if they continue as the beneficiary, or their own IRA if they elect to assume ownership and are RMD age.

The timing of the election to assume ownership is important. For example, if the owner passed prior to RBD, a sole surviving spouse is not required to take a beneficiary RMD until the owner would have reached RMD age. But if the surviving spouse is already RMD age when they assume ownership, an RMD will be due for that year.

What is confusing is that the election to assume ownership is different than the election to be treated as the owner for RMD purposes. In the former case, they actually become the owner in all respects. In the latter case, it's still a beneficiary IRA titled as such, but the RMDs can now come from the Uniform Table previously used only by actual owners.

Here is an additional explanation from the Ed Slott team:

https://irahelp.com/slottreport/propose ... e-the-rbd/

Statistics: Posted by Alan S. — Wed Aug 28, 2024 9:01 pm — Replies 5 — Views 371

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