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IRA w/o Beneficiary-Personal Rep of Estate & TIN

Question: 
I have a customer who passed away in 2014 with an IRA and no beneficiary listed. The customer was over 70 1/2 and no known RMD was taken in 2014 thru 2017 . The daughter came in with probate court papers appointing her as Personal Rep of the Estate. Am I correct thinking that the daughter needs a TIN for the Estate? Distribution from the current IRA (under deceased SSN) is coded as Death and Contribution in to an Estate IRA under the assigned TIN is coded as Transfer? Once this is completed do I take all of the RMD for 2014 thru 2017 from the Estate IRA? Also if the daughter wants to close the estate IRA, do I code this as a death distribution from the estate IRA?
Answer: 

The estate must have an EIN.

You are obligated to distribute the decedent's RMD for 2014 ASAP. Had the personal representative acted promptly, the estate would have had other options, but now all that is left is to withdraw the entire remaining balance prior to the end of 2019. They can spread it out any way they wish in that time period.

The simplest thing to do is establish a payout account "John Doe Estate, Beneficiary, John Doe, IRA" and do an internal transfer from the decedent's IRA to the payout account; i.e. do not report the distribution from the decedent's account. All distributions from the payout account, the 2014 RMD and all of those that follow, will be reported in the name and EIN of the estate and coded as distributions due to death.

If the amount is significant, the personal representative should consult with a qualified tax preparer in deciding how much money to withdraw and when.

First published on 10/29/2017

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