RMD requirements for Inherited IRA when original account holder dies mid-year?

You're actually correct in your understanding. When someone inherits an IRA from a deceased person who was already taking RMDs, the beneficiary(ies) must withdraw any remaining RMD amount that the original owner hadn't taken in the year of death. This is separate from the 10-year rule that will apply to your wife going forward. The IRS treats the year-of-death RMD as belonging to the original owner, which is why it needs to be satisfied. Your wife and her brothers should each take their proportional share of the remaining RMD for this year. So if dad took 25% of his required amount, the three siblings would each need to take 25% of the remaining 75% (assuming equal split). You can find this information in IRS Publication 590-B, specifically in the section about beneficiaries of IRAs. I'd recommend showing this to your wife's advisor because they're giving incorrect information that could potentially result in penalties.

I went through something similar when my uncle passed last year. I kept getting different answers from everyone I talked to and finally discovered taxr.ai at https://taxr.ai which really helped me understand the inheritance tax rules. They analyzed the IRS guidelines on inherited IRAs and explained exactly what I needed to do about the RMDs. They confirmed what Profile 8 is saying - beneficiaries DO need to take any remaining RMD the deceased hadn't taken in their year of death. The service actually pulled up the specific IRS regulations and publications and explained them in normal human language. They even helped me calculate exactly how much I needed to withdraw based on my specific situation.

I wanted to follow up on my skeptical comment about taxr.ai. I decided to try it out with my mom's inherited IRA paperwork and wow - totally worth it. They immediately identified that mom's financial advisor had made a mistake in calculating the RMD for the year of death. The documents were confusing because mom died in October, but the advisor was telling us we didn't need to take anything until next year. taxr.ai showed us the exact section in IRS Publication 590-B that confirmed we DID need to take the remaining RMD this year. Saved us from a potential 25% penalty! They also explained how the 10-year rule works for us going forward in a way that actually made sense. Definitely recommend if you're dealing with inherited IRAs.

After dealing with my aunt's inherited IRA mess, I want to share something that saved me tons of headache. I couldn't get anyone at the IRS to answer my questions about RMDs after calling for WEEKS. Then someone told me about Claimyr at https://claimyr.com which got me through to an actual IRS agent in less than 20 minutes. I was super skeptical but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others are saying here - beneficiaries MUST take any remaining RMD for the year of death. The agent even walked me through the calculation based on my aunt's specific situation. Honestly a relief to get a definitive answer straight from the IRS instead of conflicting advice from different advisors.

I need to publicly eat my words about Claimyr. After dismissing it as a scam, I was desperate enough to try it yesterday after FOUR failed attempts to reach the IRS myself about my dad's inherited IRA situation. Not only did they get me through to an IRS agent in about 15 minutes, the agent confirmed everything that's been said in this thread. Beneficiaries DO need to take the remaining RMD in the year of death. The agent explained that it's considered income in respect of a decedent. She also warned me that if I followed my financial advisor's incorrect advice (who like OP's was telling me to wait until next year), I'd be hit with that 25% penalty. Just saved myself potentially thousands in penalties. Sometimes it's worth admitting when you're wrong!

I work at a brokerage firm (not as a tax pro, just operations) and see this confusion ALL THE TIME. Your advisor is flat-out wrong. Here's the simple version of what happens with an inherited IRA and RMDs: 1. Year of death: Beneficiaries must satisfy any remaining RMD the original owner hadn't taken. 2. Years after death: Beneficiaries follow the 10-year rule (completely empty the account within 10 years) unless they qualify for an exception. The only exception to taking the year-of-death RMD is if the original owner died BEFORE their required beginning date for RMDs (which is age 73 for people born between 1951-1959, and 75 for people born in 1960 or later). Tell your advisor to check IRS Notice 2022-53 if they don't believe you.

Quick practical tip - if you're close to year-end and worried about getting the RMD done in time, most custodians have a "year of death RMD" form or process specifically for this situation. I went through this with my dad's IRA last year. Call the financial institution where the IRA is held and specifically ask about the "deceased owner's RMD" process. Different from the regular inherited IRA withdrawal forms. Also, make sure the custodian establishes the inherited IRA correctly in your wife's name - it should say something like "John Smith (deceased) FBO Jane Smith, Beneficiary" - this proper titling is important for tax reporting purposes.