My question is how do I report the RMD on her 1040?
- It should be posted to the individual whose SSN is on the 1099-R.
Do I enter her amount of RMD, check the box ‘I received all the RMD for 2022’ and complete a Form 5329-T Waiver of Tax with an explanation that my sister and I took the remaining RMD?
- Yes!
- To post a 5329
- Down the left side of the screen, click on Federal.
- Across the top of the screen, click on Other tax situations.
- Scroll down to Additional Tax Payments.
- Click on Start / Revisit on Extra tax on Extra tax on early retirement withdrawals.
Or is there some other process I should be following?
The rules for inheriting an IRA. The heir must take the RMD for the year the account owner died. The full RMD must be taken by December 31 in the year the account owner died, even if he or she died at the beginning of the year.
All distributions are taxable to the taxpayer and their heirs, unless they are from a ROTH account. Generally, a beneficiary reports pension or annuity income in the same way the plan participant would have reported it.
To take the RMD, beneficiaries must contact the custodian of the account and submit a death certificate. If the account owner died before he or she was required to begin distributions, then the beneficiaries do not need to take an RMD.
The money from the RMD will go directly to the beneficiary listed on the account, not the estate. That means it will be taxable income for the beneficiary. If there is more than one beneficiary, it will be split evenly.
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