fire5soon wrote:Since you and your brother are named as beneficiaries the account assets belong to the two of you, not the estate or a trust. Therefore it's your responsibility to satisfy the RMD. What should happen is an inherited IRA should be established for you, and one for your brother, and the RMD taken from those accounts. The 1099R issued will be under your SSN, but will show your father as the original depositor showing you are satisfying the RMD on his behalf. Then starting next year the RMD will begin based on your Single Life Expectancy.
I read that the Year of Death RMD comes out of the account before it becomes an inherited IRA. Meaning the IRA balance is reduced by the RMD before it is transferred to the beneficiaries. Hopefully the custodian of his IRA will know these things.
It can't come out before the IRA is retitled because it must be paid to the beneficiary(s), not to the estate or trust. It CAN come out before separate accounts for each of you are established, but that could result in accounting problems for the custodian since the year of death RMD does not necessarily have to be taken equally. For example, if your brother needs the funds, he could individually satisfy the entire year of death RMD, leaving your share untouched until you take your first beneficiary RMD before the end of 2014. The IRA custodian may have preferences regarding the year of death RMD (which does not HAVE to be withdrawn until Dec, 2013) with respect to issuance before or after separate accounts are established. But if you want to wait until the separate accounts are established and then coordinate the year of death RMD with your brother, the custodian should allow that.
The IRS Regs are silent regarding any delinquency of prior year RMDs by the owner. They only state that the beneficiary is responsible for the year of death RMD, so you have no obligation to research whether your father completed all his RMDs back to age 70.5. I have never heard of the IRS penalizing a beneficiary for anything more than the year of death RMD.
Finally, as fire5soon indicated, be sure there are no other IRAs that might have been tapped for the 2013 RMD. In addition, check to see if your father had an basis in his IRA (Form 8606) that you would inherit and result in your RMDs being less than 100% taxable. And name your own successor beneficiaries on the inherited IRA ASAP.