Sorry but I totally disagree with the statement that it goes on the final 1040. The final regs made it clear that death does not put you on an accrual basis for RMDs. The beneficiary must take what the decedent did not to avoid the 50% penalty but the beneficiary pays tax on it.

John is correct that there is an estate tax on IRD deduction because the amount included on Form 706 is the date of death value.

Some people become confused because the beneficiary is determined as of September 30 of the year after the death, but that is for inherited benefits. The beneficiary on the date of death must take the RMD that the decedent did not.

I usually recommend that terminal clients take the RMD before they pass on, that way we don't have to ask for a waiver of the 50% penalty because catching up with an IRA payment is usually the last thought when there is a death in the family, especially when it happens late in the year.