Inherited IRA and Requied Minimum Distribution

[rwtaylor844]

I forgot to take the RMD in 2023 on an inherited traditional IRA. What should I do? And how do I calculate the RMD for 2024?

[AmyC · Accepted solution]

It is common to make that mistake the first year.  You need to remove the 2023 RMD immediately and talk to them about the 2024 RMD. 

Whoever holds the IRA will normally send you a letter each year telling you the RMD. You might be able to make it an automatic payment so this doesn't happen again.

You need to file a form 5329 and request a waiver of the penalty. You'll calculate that penalty in Part 9 of Form 5329. To request a waiver, enter “RC” (for reasonable cause) and the amount of shortfall you want waived on the dotted line next to Line 54. Attach a letter to your tax return explaining the situation.

Reference: Form 5329 article and Calculate Minimum Distribution - Free Online RMD Calculator

[dmertz · Accepted solution]

The RMD for 2024 will be calculated based on the 2023 year-end balance in the IRA.  The fact that you will have taken the 2023 RMD late means that the year-end balance will be a bit higher than it would have been had you taken the 2023 RMD timely, so the 2024 RMD will be slightly higher than it would have otherwise been.  No adjustment to the 2023 year-end balance is to be made with regard to the late-take RMD.