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Inherited IRA RMD not taken

My wife received an inherited IRA from her deceased mother at the end of 2014. Since she was under 70.5 we thought no RMD was required. We just found out we needed to withdraw about $500 for each of 2016 2017 and 2018 tax years and need to file amended returns for each of these years along with forms 5329 for each year. We plan to file a waiver request with the 5329s to try to eliminate the 50% penalties.  We never got 1099Rs for these years from the banks holding the inherited IRA. Can you provide any assistance in filing the amended returns and 5329s?

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1 Reply
dmertz
Level 15

Inherited IRA RMD not taken

The only things needed for the missed RMD years is the Form 5329 for each of these years requesting waiver of the excess accumulation penalties.  Nothing changes on the filed tax returns.  You should be able to file these without including Form 1040X, but you'll need to include an explanation statement with each.  Simplest will be to prepare the Forms 5329 manually using prior-year forms and instructions downloaded from the IRS.  The instructions for requesting a Waiver of tax are on the last page of the instructions.  When filing Forms 5329 stand-alone, be sure to sign and date each of these forms.

 

https://apps.irs.gov/app/picklist/list/priorFormPublication.html

 

Prior to filing these Forms 5329 your wife should receive a distribution of the total of late RMDs (and perhaps also including the 2019 RMD) so that in the explanation statement you can indicate that she has taken the necessary action to make up the RMD shortfall.  This distribution will be reportable on her (your joint) 2019 tax return.

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