Hi, my question is what would be the best option for my stepmother who either jointly owned or inherited an IRA from my dad who is now deceased. She will be turning 70 this year and has received a letter that she must start drawing the RMD soon or face penalties. She wants to gift the IRA to one of the children but she is worried about the tax issues. Is there a way that she could gift it without her incurring any tax liabilities?A.: RS, she probably inherited it as his named beneficiary.
If that is correct, the minimum amount is calculated by dividing the Dec. 31, 2018 balance by 27.4 or 3.65%. Each year, the factor will increase according to this table. She can take it anytime this year, all at once or in as many installments as she likes. If she turns 70½ in 2019, her first RMD can be delayed as late as April 1, 2020 but all of her future RMDs will need to be completed by Dec. 31 of each year based on the Dec. 31 balance of the prior year. Therefore, if she does delay the first RMD she will actually take two RMDs in 2020, the delayed 2019 RMD and the 2020 RMD due by Dec. 31, 2020. The taxable income for both will need to be reported on her 2020 tax return.
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