USA Tax basis for in-kind RMD distributions related to an inherited IRA


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A child inherits an IRA from a parent to be transferred to a new beneficiary IRA account set up by the child to receive the assets.

Prior to transferring the assets, in order to satisfy the RMD amount from the original IRA in the year inherited, the child takes an in-kind distribution of stocks that, valued when distributed, meets or exceeds the parent's RMD for that year as required.

What is the child's basis for the stocks that are distributed to them to satisfy the RMD? (original basis in original IRA? step-up basis as of distribution date?)

The next year the child also takes an in-kind distribution of stocks from the inherited IRA to satisfy their own RMD in that account. What is the child's basis of those stocks?
 
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AGH the CPA

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This looks like a homework problem?

Please note that if you are looking for assistance with an exam-style question, you must attempt the question yourself before asking for help. You can then state the answer you have so far and explain which aspect you need help with. Anyone posting exam-style questions expecting the answer to be given to them will have their posts removed. Repeat offenders will be banned from the forum.

and post here: https://www.accountantforums.com/forums/exams-and-studying.28/
 
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Hi, sorry if this appears to be an exam question, but it's not. It is a question about my own current situation. My father just passed away and I inherited his small IRA account.

I believe that the basis of any stocks in his original IRA account that are distributed to me in-kind from either his original IRA account or from my own beneficiary IRA account will keep their original basis in his original IRA account and not get a stepped up basis, but I am not sure. That is why I asked.

I'm not clear whether the basis gets stepped up or not.

Again, my apologies. I wanted to make the question sound generic because I thought it would make it more clear.
 

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