dmertz
Level 15

Deductions & credits

"The sponsor realized that the account should have been liquidated by the end of 2017"

 

It seems unlikely that you would have been required to completely empty the entire account by the end of 2017.  For that to be the case, it seems that now in 2025 you would have to be age 98, which I would find impressive for someone posting on this form.  In any case, filing a 2024 Form 5329 would make no sense because with the entire account having been distributed by the end of 2024, there cannot have been any excess accumulation for 2024.

 

I suspect that the "sponsor" mistakenly believed that the 10-year rule applied.  However, the 10-year rule only applies in the case where the decedent died after 2019, which is not the case here.

 

(I suppose that the 401(k) plan agreement could require that the beneficiary drain the account by the end of the 10th year following the year of death, but that would be a plan requirement, not a statutory requirement, meaning that failure to drain the account by that deadline would not constitute an excess accumulation that would require filing Form 5329.)

 

Have you been taking RMDs from the inherited account each year since 2008?