No RMDs for both spouses in 2018 - both now deceased

[Uncle Sam]

Same client as direct deposit issue.
Went through parents' 2018 tax information. In 2017 there was an IRA distribution taken - but have no supporting information to determine who and how much or even what the RMD should have been..
For 2018, I look through their paperwork and find:
Father - age 87 in 2018, had a 60 month IRA CD maturing 9/5/19 - ~ $ 12,000 principal - died 12/28/18
Mother - age 84 in 2018 had a 60 month IRA CD maturing 9/5/19 - ~ $ 4,700 principal - died 02/10/19
No IRA distributions were taken at all in 2018.
What's the best thing to do for 2018 - do a 50% Waiver Request for each on back of Form 5329, instructing daughter to remove funds from IRA prior to filing - whoever is beneficiary.

[Burke]

Is daughter Executor? She could check with bank or other custodian to determine what was distributed in 2017 and the amounts. And they (or you) can figure what 2018 should have been by reviewing the balance on 12/31/17. If not taken, it should be done now before account is distributed to beneficiary(ies). And yes, complete 5329 asking for waiver.

[kathyc2]

Burke, you certainly know more about estates than me, but my understanding is if the RMD was not taken before death, the responsibility to take it, and the taxability of it lies with the beneficiary.

[Uncle Sam]

Daughter is executrix for both parents as I mentioned in prior post, should the other spouse die first. I will have daughter get in touch with IRA custodian (credit union) to see what RMD for each was. THere WAS an IRA distribution shown on 2017 return, but don't know whose or how much for each spouse, as I don't have 5398 form showing RMD for 2017. .I will advise daughter to take out 2018's RMD - even if breaking CD due to death, prior to filing parents' return.

[Burke]

Burke, you certainly know more about estates than me, but my understanding is if the RMD was not taken before death, the responsibility to take it, and the taxability of it lies with the beneficiary.

That is correct. This is a little complicated. I am assuming that they were probably both named as each other's IRA primary beneficiary. If so, ownership of the IRA of the husband passed to the surviving spouse at his date of death (12/28/18) and no RMD was taken. However, no return can be filed for him for the year following the year of death, so he cannot file a late RMD. I am assuming she had not withdrawn any proceeds from his or her IRA as of 2/10/19, nor transferred his account into her name. Therefore, if no contingent beneficiary was named on the wife's account, both IRA's go to the wife's estate and the will controls how the proceeds are to be paid. The wife's estate will claim the proceeds as taxable income and distribute proceeds after all income and expenses are accounted for. Was there a contingent beneficiary named on the 2nd IRA? An executor or personal representative can surely obtain all this information from the custodian/bank, including the RMD amounts for 2018. She will be responsible for filing the 2018 return for her parents and the 2019 return for her mother, if necessary. She will make claim for the IRA proceeds as Executor if they are payable to the estate, or as beneficiary if they are payable to her. In either case, all will be paid in 2019. The IRS will not penalize the deceased(s) for failure to take the RMD's. Facts other that what I have assumed here might change how this is handled. Need to also review the wills. If he did not leave everything to his wife, it can get further complicated.

[Uncle Sam]

Neither spouse has taxable estates - neither exceeds either IRS or NYS threshholds.
All I'm primarily concerned with right now is filing a proper 2018 1040 - that's why I'm concerned with at least establishing grounds for no IRS penalty for no RMD taken in 2018 by EITHER spouse.
An RMD - that should have been taken by each. I expect that daughter (only beneficiary) to take 2018 RMD for each at minimum prior to filing 2018 parents' return. Then she can follow whatever rpocedures are necessary according to will. I've advised daughter to seek an attorney for all the legal issues.