A parent left me their IRA a few years ago, it has been a Beneficiary IRA, but the 2017 RMD was not taken until 2018. I'm in my mid-50s, so how do I handle this?

levaragon · ‎June 4, 2019

DianeW · ‎June 4, 2019

For each subsequent year after your required beginning date, you must withdraw your RMD by December 31.

If you do not take any distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required, which is the difference between the amount that was required to be distributed and the amount that was actually distributed. The tax is due for the tax year that includes the last day by which the minimum required distribution must be taken.

You can request a waiver of the 50% penalty in Form 5329 Part IX. You will most likely get the waiver if the error was the fund company's fault and you take the distribution as soon as possible, or you have already taken it in 2018. To request a waiver you include Form 5329 and an explanation statement with your tax return. TurboTax will walk you through the upgrade and keep your data, the form is not available in the TurboTax Free Edition.

To report the excise tax, you may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
See the Form 5329 instructions for additional information about this tax.

More information is available at the links above and the one entered below.

IRS Topic-Required Minimum Distributions (RMDs)

View solution in original post

DianeW · ‎June 4, 2019

For each subsequent year after your required beginning date, you must withdraw your RMD by December 31.

If you do not take any distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required, which is the difference between the amount that was required to be distributed and the amount that was actually distributed. The tax is due for the tax year that includes the last day by which the minimum required distribution must be taken.

You can request a waiver of the 50% penalty in Form 5329 Part IX. You will most likely get the waiver if the error was the fund company's fault and you take the distribution as soon as possible, or you have already taken it in 2018. To request a waiver you include Form 5329 and an explanation statement with your tax return. TurboTax will walk you through the upgrade and keep your data, the form is not available in the TurboTax Free Edition.

To report the excise tax, you may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
See the Form 5329 instructions for additional information about this tax.

More information is available at the links above and the one entered below.

IRS Topic-Required Minimum Distributions (RMDs)

fanfare · ‎June 4, 2019

how many is a few? The mandate to take RMD from inherited IRA begins in the year following the year of the decedents death. Also in the year of death, if the owner was required to take an RMD, the beneficiary must take that one too if it had not been taken.

DianeW · ‎June 4, 2019

@levaragon These details can be determined by checking with the plan administrator.
@fanfare Thank you for the added details.

levaragon · ‎June 4, 2019

Thanks for the feedback! I've had the IRA for at least three years and the RMD was taken previously. It just didn't happen in 2017. Once again, thanks!!!

DianeW · ‎June 4, 2019

@levaragon You're welcome!

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A parent left me their IRA a few years ago, it has been a Beneficiary IRA, but the 2017 RMD was not taken until 2018. I'm in my mid-50s, so how do I handle this?