Year of Death
It is customary for people to wait until year end to take their required minimum distribution.Therefore, it is likely that people die having not taken their RMD for the year. That RMD must be taken and reported on the benficiary tax returns before the IRA is distributed to beneficiaries.
Death after Required Beginning Date
We already discussed how a beneficiary takes distreibutions at IRA Distribution Rules. But what if no designated beneficiary was named? (e.g. no beneficiary names at all or one that does not qualiy, such as an estate?). Then the IRA may be emptied over the remaining life expectancy of the deceased, using the distribution table for beneficiaires, substracting 1 each year from the age for the divisor.
Death Before Required Beginning Date
If a beneficiary is named, then we have no problem and just follow the rules outlined at IRA Distribution Rules. However, if no designated beneficiary was named (e.g. no beneficiary names at all or one that does not qualiy, such as an estate), then the IRA must be emptied by the end of the 5th year followng the owners date of death. No distributions are required in the interim.
For a very technical explnation of post Death issues, get a copy of Natalie Choates book.