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Level 1

Beneficiary of an IRA but the holder did not take required RMD

I was the named beneficiary of a traditional IRA from my mother, who passed away on 12/29/2017. I received a lump sum distribution in early 2018. In going through the financial statements records, I do not see where she took her RMD for the year 2017. How do I account for this when filing my 2018 taxes?

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Level 20

Beneficiary of an IRA but the holder did not take required RMD

The lump-sum distribution you received satisfied her 2017 RMD as well as your 2018 RMD, but because you received it after the end of 2017 your 2017 tax return should have included Form 5329 requesting a waiver of the excess accumulation penalty.  See Waiver of tax on the last page of the instructions for 2017 Form 5329 to see how this form needs to be prepared:

https://www.irs.gov/pub/irs-prior/i5329--2017.pdf

As for reporting the distribution, you'll receive a code 4 2018 Form 1099-R near the end of January 2019.  Enter this Form 1099-R into 2018 TurboTax under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R).  Be sure to then click the Continue button on the Your 1099-R Entries page and indicate that you received all of your RMD for 2018.

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Level 20

Beneficiary of an IRA but the holder did not take required RMD

The lump-sum distribution you received satisfied her 2017 RMD as well as your 2018 RMD, but because you received it after the end of 2017 your 2017 tax return should have included Form 5329 requesting a waiver of the excess accumulation penalty.  See Waiver of tax on the last page of the instructions for 2017 Form 5329 to see how this form needs to be prepared:

https://www.irs.gov/pub/irs-prior/i5329--2017.pdf

As for reporting the distribution, you'll receive a code 4 2018 Form 1099-R near the end of January 2019.  Enter this Form 1099-R into 2018 TurboTax under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R).  Be sure to then click the Continue button on the Your 1099-R Entries page and indicate that you received all of your RMD for 2018.

View solution in original post