My problem was with an inherited IRA. I took considerably more than the RMD so I answered that only some of the distribution was used for the RMD, which seems technically true. However, I was then subject to a significant penalty. Once I changed the answer to ALL of the distribution applied to the RMD it reverted back to no penalty. I find the language of these questions confusing. (And it doesn't help that the IRA was moved from one institution to another last year.) The kicker is that I may not have noticed this except that after a software update I went from a significant refund to owing. Yikes.
