RMD Rules When an Account Owner Dies: The Year-of-Death Distribution

When a traditional IRA or 401(k) owner dies mid-year, their required minimum distribution for that year doesn't die with them. Depending on whether they had passed their Required Beginning Date, the beneficiary may be legally obligated to complete the decedent's final RMD by December 31 of the year of death — or face the same 25% penalty that applies to living account owners who miss distributions. Here's exactly how the rules work for 2026.

The critical fork: did the owner die before or after their Required Beginning Date?

Everything depends on one question: had the account owner reached their Required Beginning Date (RBD) before they died?

The rule is straightforward:

• Died before the RBD: No year-of-death RMD is required. The beneficiary steps into the inherited account with no obligation for the year of death.²
• Died on or after the RBD: The beneficiary is responsible for taking whatever portion of the decedent's annual RMD was not yet distributed by the time of death. Deadline: December 31 of the year of death.

Practical examples of the before/after RBD split

Note Eleanor's case: born in 1952 (turns 74 in 2026), her RBD is April 1, 2026. If she dies in January 2026, no year-of-death RMD. If she dies in May 2026 (one month after her RBD), a year-of-death RMD IS owed.

How to calculate the year-of-death RMD

The year-of-death RMD uses the same calculation as any annual RMD — but you use the age the owner would have attained on December 31 of the year of death, not the age at time of death.²

Formula: (December 31 prior-year account balance) ÷ (ULT divisor for age at Dec 31 of year of death)

Example: Robert (born 1948) dies July 2026 with a $1.2M IRA (Dec 31, 2025 balance). He had taken $6,000 of his 2026 RMD before dying.

• Age at December 31, 2026: 78
• ULT divisor at 78: 22.0 (T.D. 9930, effective 2022)
• Full 2026 RMD: $1,200,000 ÷ 22.0 = $54,545
• Already taken: $6,000
• Remaining year-of-death RMD: $48,545 — due by December 31, 2026

Year-of-death RMD estimator

Who must take the year-of-death RMD?

The obligation passes to the beneficiary (or beneficiaries) named on the account.² Several important points:

• Any beneficiary can satisfy it. If there are multiple beneficiaries (e.g., three adult children each inheriting one-third), any one of them — or any combination — can take the remaining year-of-death distribution. The IRS cares that the total amount comes out, not which beneficiary takes it.
• If no beneficiary is named, the estate is responsible for taking the distribution and reporting it on the decedent's final tax return or a fiduciary return.
• Surviving spouse special case. A spouse who inherits and rolls the IRA into their own account still must take the year-of-death RMD before completing the rollover. The rollover itself cannot include the year-of-death RMD amount — RMDs are never rollover-eligible under IRC §408(d)(3).

Deadline: December 31 of the year of death

The year-of-death RMD must be taken by December 31 of the year the account owner died. There is no extension. Unlike the first-year RMD deferral option available to living account owners (who can push their first distribution to April 1 of the following year), this April 1 relief does not extend to the beneficiary's obligation to complete the decedent's RMD.

If the owner died in November or December, beneficiaries often don't receive account transfer paperwork in time to take the distribution from the renamed inherited account before year-end. In that case, the distribution can be taken directly from the account while it is still titled in the decedent's name, before retitling is complete. Coordinate with the custodian immediately.

After the year of death: the 10-year rule begins

Once the year-of-death RMD is satisfied (or waived, in the before-RBD case), the inherited account falls into the standard post-death distribution framework.³

See our Inherited IRA 10-Year Rule guide for a full calculator comparing annual minimums vs. equal-spread distributions with estimated taxes.

What if the year-of-death RMD was missed?

If no one took the decedent's remaining year-of-death RMD by December 31, the estate or beneficiary faces the same 25% excise tax on the shortfall that living account owners face for missed RMDs — or 10% if the shortfall is corrected within the two-year Correction Window.

The same Form 5329 reasonable-cause waiver process applies. Executors and beneficiaries who discover a missed year-of-death RMD should:

1. Take the missed distribution as soon as possible from the inherited account.
2. File Form 5329 for the year the RMD was missed, citing reasonable cause (most estates have a legitimate explanation — probate delays, custodian retitling lag, lack of awareness).
3. Attach a written explanation and take the corrective distribution before the correction window closes (December 31 of the second year following the missed year).

See our Missed RMD Penalty Guide for the complete correction process, Form 5329 instructions, and how to write an effective reasonable cause letter.

Tax reporting for year-of-death distributions

Distributions taken from an inherited IRA in the year of death — including the completion of the decedent's year-of-death RMD — are reported on the beneficiary's (or estate's) tax return, not the decedent's final return.² The custodian will issue a Form 1099-R to whoever received the distribution.

The distribution counts as ordinary income in the year it is received. If the beneficiary takes both the year-of-death RMD (completing the decedent's obligation) and their own year-1 inherited IRA distribution in the same calendar year, both amounts appear on the beneficiary's tax return as ordinary income — potentially pushing the beneficiary into a higher bracket. This is worth planning for, particularly if the beneficiary is still working or has high income.

Non-deductible IRA basis (Form 8606 basis) transfers to the beneficiary. The tax-free portion of each distribution is calculated by applying the pro-rata rule to the inherited account balance. See our Non-Deductible IRA RMD guide for how to calculate the tax-free fraction.

Special cases worth knowing

Owner died in the first year of RMD eligibility (age 73 in year of death)

If the owner turned 73 in the year of death and died before their April 1 RBD, there is no year-of-death RMD — even though the 2026 RMD obligation technically existed for that calendar year. The "before RBD" rule takes precedence. The beneficiary simply inherits the account and the 10-year rule (with no annual RMDs during years 1–9) applies.

Owner had a qualified spousal rollover pending

A surviving spouse inheriting a traditional IRA has several options — spousal rollover (treat as own), inherited IRA, or the SECURE 2.0 §327 election. Regardless of which path the spouse chooses, the year-of-death RMD must be satisfied first. A spousal rollover that captures the year-of-death RMD amount is not valid — the RMD must come out before any rollover is executed.

Multiple IRA accounts

If the decedent owned multiple traditional IRAs, the year-of-death RMD is calculated separately for each account (using each account's prior December 31 balance and the same ULT divisor). However, the beneficiary can pool the remaining obligation and satisfy it from any one (or combination) of the inherited accounts — the IRA aggregation rules still apply for the year-of-death distribution. The amounts taken from each account will produce separate 1099-Rs.

401(k) and other qualified plans

For employer plan accounts (401(k), 403(b), 457(b), TSP), the year-of-death RMD calculation uses the same prior December 31 balance and ULT divisor method. However, unlike IRAs, 401(k) plan RMDs cannot be aggregated — each plan must satisfy its own year-of-death RMD separately. Beneficiaries should contact each plan administrator immediately to coordinate the distribution before December 31.

Practical checklist for executors and beneficiaries

When a financial advisor helps most

The year-of-death distribution is often the first task a new beneficiary faces under time pressure — and mistakes are costly. A fee-only advisor with retirement distribution expertise can:

• Determine RBD status and calculate the exact year-of-death RMD across multiple accounts
• Coordinate with custodians to take the distribution before December 31 (especially important when account retitling is pending)
• Advise the surviving spouse on the optimal inherited account path (spousal rollover vs. inherited IRA vs. SECURE 2.0 §327 election)
• Model the 10-year distribution schedule using bracket-filling math to minimize lifetime taxes on annual RMDs across the 10-year inherited IRA window
• Identify non-deductible IRA basis (Form 8606) that reduces taxable income on every distribution