Thank you @etlowe. I reviewed your return. Your Form 1099-R should not have both code 7 and G, the custodian issued this incorrectly. Please see 1099-R instructions for details. You should have received a 1099-R for the RMD distribution with code 7 and another 1099-R for the rollover with code G. You should contact the custodian. Once I enter a separate Form 1099-R with code 7 (for the RMD) and a Form 1099-R with code G (for the rollover) the penalty is removed from Form 5329.
Please see How do I file an IRS tax extension?
@MaxBuck Thank you. I reviewed your return. To clarify, both inherited IRA's were inherited from the same person? If yes, then you can use one inherited IRA to meet the minimum for another since they were both inherited from the same person.
But if you do take the minimum amount from the other inherited IRA, you may have to adjust how much you report taking from each. For example, if each IRA required $20,000 but you took $30,000 from one and $10,000 from the other, you would report $30,000 and $10,000, respectively, as the RMD for each account. The total RMD you report for all IRAs inherited from the same person must match the actual total, even if the amounts from specific accounts vary.
To clarify, did you take all the RMD for the inherited IRA's? Because if I combine the RMD amount entered it is more than the distribution of the two IRA's?
If you took all the RMD for 2024 and both IRA's were from the same person then you would enter the distribution amount on the RMD for this account screen and then select all of it was applies as RMD.
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