Who Takes the Year-of-Death RMD on an Inherited IRA? The Beneficiary Does

A guide from the Inherited IRA RMD Calculator.

Your father dies in October. He was 78, taking RMDs every December like clockwork, and this year he never got to it. You are the beneficiary, grieving, and somewhere in the stack of paperwork sits a required minimum distribution that nobody took. Who takes the year of death RMD on an inherited IRA? The obligation did not die with him. It passed to you, and the deadline is the same one he had: December 31.

Here is how it works mechanically. The IRS treats the beneficiary as the owner of the account from the moment of inheritance, for RMD purposes, even before the account is retitled. Any RMD the owner would have had to take for that year, that he did not take, must be taken by the beneficiary. The distribution is reported under your Social Security number, not his. Practically, the custodian can pay it from the decedent's account directly to you, or set up the inherited IRA first, move the funds, and pay it from there. Either way the money lands with you and the tax paperwork carries your name.

The spouse version has one extra trap. A surviving spouse can roll the inherited IRA into their own IRA, which is usually the right move, but the year-of-death RMD is not eligible for rollover. RMDs never are. So the sequence is: distribute the year-of-death amount, report it as income, then roll over the rest. Rolling the full balance and taking the RMD from your own IRA afterward does not fix the ordering, and it creates a mess with excess contributions that is expensive to unwind.

Who takes the year of death RMD when there are several beneficiaries?

If the account was split among multiple beneficiaries, each one takes their share of the remaining year-of-death RMD. A $36,000 RMD split three ways means $12,000 each, by December 31, under each person's own Social Security number. One beneficiary cannot take the whole thing on behalf of the others. And none of it can be aggregated with your own IRA's RMD: beneficiary IRAs live in a separate bucket from your personal accounts for aggregation purposes.

There is also a case where none of this applies. If the owner died before their required beginning date, the age RMDs start, then there was no RMD due for the year of death at all. The year-of-death RMD only exists when the owner was already in pay status. This is the first thing to check, because it ends the question cleanly for everyone who inherits from someone who died younger.

Miss the deadline and SECURE 2.0 sets the price: a 25 percent excess accumulation penalty on the amount not taken, cut to 10 percent if the failure was due to reasonable error and you correct it promptly. It used to be 50 percent, which is why older articles still quote that number. File Form 5329, take the missed distribution, and request the reduction or waiver in the same filing.

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I will not pretend this one has a tidy resolution. The rule is simple and the timing is brutal: families discover it in November or December, custodians process paperwork slowly in December, and the deadline does not move. If you inherited an IRA this year, call the custodian this week and ask one question: was the owner's RMD for this year fully taken? Everything else flows from the answer.

Frequently asked questions

Who takes the year-of-death RMD on an inherited IRA?

The beneficiary. If the account owner was taking RMDs and died before taking that year's distribution, any remaining RMD must be taken by the beneficiary by December 31 of the year of death and reported under the beneficiary's Social Security number.

Does the year-of-death RMD have to come out by December 31?

Yes. The deadline is December 31 of the year the owner died. It cannot be pushed into the next year, and custodians will not remind you, especially if the inherited IRA was just retitled and they have no record of the decedent's RMD status.

Can a spouse roll over the year-of-death RMD into their own IRA?

No. RMDs are never eligible for rollover, including the year-of-death RMD. A surviving spouse can roll the rest of the balance into their own IRA, but the year-of-death amount must be distributed and reported as income first.

Is there a year-of-death RMD if the owner died before RMDs started?

No. If the owner died before their required beginning date, there is no RMD for the year of death. The year-of-death RMD only exists when the owner was already in pay status and had an RMD due for that year.

What is the penalty for missing the year-of-death RMD?

Under SECURE 2.0, the excess accumulation penalty is 25 percent of the missed amount, reduced to 10 percent if corrected promptly and the failure was due to reasonable error. Before 2023 it was 50 percent. File Form 5329 to report and request the reduction or waiver.

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