In 2017, my RMD was short $5,500 and I corrected it by instructing the IRA custodian to distribute that amount on 1/22/18. I filed Form 5329 with my Form 1040 and the IRS waived the penalty. The issue I now face is that the 1099-R I received for 2018 obviously includes this $5,500 that is associated with the 2017 RMD. If I include the full amount shown on the 2018 1099-R, then I will be paying tax on an amount I already paid tax on in 2017. What is the correct way to report this issue? My thought is that if I reduce the "Taxable Amount" (Box 2b) by the $5,500 it will provide the correct and equitable result, but I'm concerned it will raise red flags if the 1099-R does not match what is reported to the IRS.
