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Deceased IRA Owner- beneficiary Distribution Form?

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Question: 
When an IRA owner dies are you required to open a beneficiary IRA and/or complete a beneficiary distribution form when paying out funds to the beneficiary?
Answer: 

No. There are no forms required by the IRS. Forms vendors make up several that do nothing more than to fill their pockets, but no one can deny the value of having written instructions before you act.

You will report payments to the beneficiary in the beneficiary's name and TIN as a "distribution due to death." Many banks voluntarily use a "payout account" in the name of the beneficiary so their information reporting comes off automatically at year end. The account is for the convenience of the bank; it is not a legal requirement.

Basic IRA training would incorporate this information.

First published on 11/26/2017

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