SLC Tortfeasor
Recycles dryer sheets
- Joined
- Jun 17, 2005
- Messages
- 233
Please chime in if you know the answer to these questions, so that I can avoid the cost of hiring a CPA to answer them!
My mom died in October 2023. She left her house to my sister, and her IRA to me. My sister is the successor trustee in charge of closing out my mom's estate. Once my sister has paid funeral expenses, taxes, and wrapped up a few other things, her last responsibility will be to give the IRA to me. This should likely happen sometime in Fall 2024.
My Mom was required to take RMDs from her IRA, so I will also be required to take RMDs once I inherit the IRA. Questions:
1. Will my sister be required to take the RMD from my Mom's IRA in 2024? Or can she avoid taking an RMD with the understanding that I'll take it from the IRA when I inherit it?
2. If my sister takes an RMD from my Mom's IRA in 2024, does that relieve me of the obligation to take the RMD for 2024?
Here's why this matters to me:
My mom's estate will be in a much lower tax bracket than me for 2024. So it seems preferable (if it jives with tax law, that is) to have my sister pay various estate expenses using the proceeds from the 2024 RMD. The estate will pay income taxes on the RMD at the estate's low tax bracket, which is better than me paying taxes on the RMD at my higher tax bracket.
In other words, we could save a lot of money if my sister takes the RMD, pays the taxes on it at my mom's lower tax bracket, and then I don't have to take the RMD for 2024 when I inherit.
On the other hand, if I'll be required to take the RMD in 2024 regardless of whether my sister has already taken the RMD, then it doesn't matter.
Thoughts?
My mom died in October 2023. She left her house to my sister, and her IRA to me. My sister is the successor trustee in charge of closing out my mom's estate. Once my sister has paid funeral expenses, taxes, and wrapped up a few other things, her last responsibility will be to give the IRA to me. This should likely happen sometime in Fall 2024.
My Mom was required to take RMDs from her IRA, so I will also be required to take RMDs once I inherit the IRA. Questions:
1. Will my sister be required to take the RMD from my Mom's IRA in 2024? Or can she avoid taking an RMD with the understanding that I'll take it from the IRA when I inherit it?
2. If my sister takes an RMD from my Mom's IRA in 2024, does that relieve me of the obligation to take the RMD for 2024?
Here's why this matters to me:
My mom's estate will be in a much lower tax bracket than me for 2024. So it seems preferable (if it jives with tax law, that is) to have my sister pay various estate expenses using the proceeds from the 2024 RMD. The estate will pay income taxes on the RMD at the estate's low tax bracket, which is better than me paying taxes on the RMD at my higher tax bracket.
In other words, we could save a lot of money if my sister takes the RMD, pays the taxes on it at my mom's lower tax bracket, and then I don't have to take the RMD for 2024 when I inherit.
On the other hand, if I'll be required to take the RMD in 2024 regardless of whether my sister has already taken the RMD, then it doesn't matter.
Thoughts?