Entering RMD for deceased spouse's IRA

[ellinj]

My wife who passed away early last year had an IRA. She had not taken the RMD when she died.  Fidelity rolled the IRA into a new Beneficiary IRA for me and I then was able to take the RMD.  I am having a little trouble figuring out how to answer the questions for the 1099R in Turbotax.

First it asks me to enter the nnumbers from the IRA 

I then answer Yes to Did {myName} Inherit the IRA and that was from my spouse.

Did   {myName}  put the inherited funds into  {myName}  own IRA account

This is what trips me up.  I did put the entire account into a new IRA in my name. If I answer yes, I start getting questions that make it sound like the RMD was placed into an IRA, which is wasn't

You told us that {myName} rolled over the entire $X distribution to another qualified account. This is not correct as the RMD went into a cash account.   I went back and changed the previous answer to no, {myName}  did not put the money into {myName}  own IRA account.  It's not clear if the distribution they are talking about is the RMD or the account as a whole.  

Or maybe I just should answer No, it was not inherited since the beneficiary IRA is now mine.

[DaveF1006]

 Yes, it can be confusing on how to enter this information in your return. Hopefully this will clear up some of the confusion.

1. Inherited IRA: Since the IRA was inherited from your spouse and rolled into a Beneficiary IRA, you should answer "Yes" to the question about inheriting the IRA. This ensures TurboTax understands the context of the account. 
2. RMD and Account Rollovers: The confusion seems to stem from the distinction between the RMD (Required Minimum Distribution) and the rest of the account. When TurboTax asks if you "put the inherited funds into your own IRA account," it is referring to the entire account, not just the RMD. Since you rolled the inherited IRA into a new IRA in your name, you should answer "Yes" to this question.
3. Once you have transferred the money into your own IRA account, you took out the RMD and placed it into a cash account. You do not need to supply any additional reporting for this.  The only thing IRS and "Turbo Tax" is interested in is if you paid the required distribution for this year not how you deposited the RMD distribution once the funds were rolled into your IRA account. 

[ellinj]

To clarify this 1099R is from the beneficiary IRA.   If I follow your suggestion and choose

Did {myName} Inherit this IRA - YES

Did {myName} put the money into {myName} own IRA - YES

It then tells me.  

You told us {myName} rolled over $5000 to another qualified account.  

This isn't correct. as that's the RMD amount not the value of the IRA.   Should I have gotten a second 1099 for my spouses account Showing the rollover to my new IRA? 

[ellinj]

To clarify,

1 .I had a Spouses IRA -> rolled over to what fidelity called a BDA account in my name.

2. I took the required RMD from the BDA account.

3. BDA account rolled into a new IRA 

I have a 1099 for the RMD from 2,  but not a 1099 showing the distribution from 1 to 2 or 2 to 3. Number 2 is marked with distribution code 4. not 7.  The line of questions from TT seem to imply its looking for the 1099 from the first rollover.

[KrisD15]

An "inherited IRA" is the same as a "Beneficiary IRA".

It sounds like this is what you have. The account of your late wife is now your account.

You would answer "Yes, you inherited this account"

You would answer "No, you did not put this into your own account"

The answer would only be yes if the original account was closed and you took the distribution and deposited it to a different account. 

When you properly say "No" to the second question "Did you put into your own account" the program will ask if this was an RMD for the original owner. You will say "Yes "since she had not taken the distribution before her passing.

No, you will not get another 1099-R since the account was only renamed.

Since your wife had reached the age of required minimum distributions in 2024, you will need to take an RMD from this inherited/beneficiary account going forward based on your age. 

HERE is more information from the IRS

HERE is a link about filing after losing a spouse

We are very sorry for your loss

[fanfare]

@KrisD15 

This answer does not correspond at all with the facts that 

@ellinj  stated immediately above.

[ellinj]

In 2024, I had 3 different accounts with 3 different account numbers 

1. The original IRA in wife's name

2. the BDA IRA in my name

3. my new Rollover IRA in my name

the only 1099 I have is the RMD from the BDA. That 1099 only has the RMD not the distribution to the new Rollover IRA. I feel like to properly answer these questions I need the 1009R from the original IRA.   If I ignore the first rollover/transfer and enter the 1099R as if it were mine the tax seems to come out correct. I am taxed on the total of the RMD from my IRA and the RMD from the BDA ( formerly the wife's IRA).  Even though there is no tax implication I am unsure if I can simply omit the rollover from 1. to 2. 

[KrisD15]

Apparently there is a delay as to what is forwarded on my side, and I was not aware of this additional information.

My answer was made under the assumption you were only entering a 1099-R in regard to an inherited IRA that reported the original owner's RMD. 

Although you updated the facts, my answer would be the same, you are entering a 1099-R and reporting her RMD.

(When you say "Yes" the account was inherited, the program will ask if the distribution was the RMD for the original owner, you would select "Yes" since she needed to make a RMD for 2024) 

I am under the impression that only the remaining balance was rolled-over, not the Required Minimum Distribution. 

The Rollover is not reported. 

According to the IRS, because the death occurred in 2024 (after 2020) 

"If the account holder's death occurred after the required beginning date, the spouse beneficiary may:

Keep as an inherited account
Take distributions based on their own life expectancy, or
Rollover the account into their own IRA"

@ellinj 

[fanfare]

scanning the forum you will see that TurboTax 2024 has issues with the questions about RMD causing difficulty.

For simplicity, you can say the distribution was not an RMD.

Use code 7, not 4 and you will not have any inherited IRA quesions.

rollover :: since you don't have a 1099-R for it, it is not reportable

@ellinj 

[ellinj]

@KrisD15  "(When you say "Yes" the account was inherited, the program will ask if the distribution was the RMD for the original owner, you would select "Yes" since she needed to make a RMD for 2024) 

I am under the impression that only the remaining balance was rolled-over, not the Required Minimum Distribution". 

You have it mostly correct except that the RMD was taken after the rollover.