- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
The RMD requirement is based on the age the deceased would be if still alive. The financial institution holding the IRA had a duty to inform you of the RMD amount each year. Also when you entered the 1099-R with a code 4 and the IRA box checked, the interview would prompt you for the year the decedent was born and then ask about if the RMD was taken.
You have a problem now because there is a huge 50% penalty for each missed RMD which the IRS can waive if you request a wavier and provide an reasonable explanation as to why it was missed.
First you need to have the IRA custodian calculate the RMD amount for each missed year and then take a distribution of the total missed RMD's ASAP.
Then you need to file a separate 5329 form for each missed year along with the explanation. Be sure to say that you have taken the shortfall.
You can get past years 5329 form here:
From 5329 instructions:
Quote:
"Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
1. Complete lines 52 and 53 as instructed.
2. Enter “RC” and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your request for a waiver. "
Enter zero on line 55 - do not pay the penalty. In the unlikely chance the IRS denies the waiver they will send a bill.