inherited IRA

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My sister died in 2022. In 2023 I made a withdrawal even though IRS had suspended the requirement to withdraw during 2023. Do I answer yes or no to the turbo tax question asking if the withdrawal was and RMD?

dmertzAnswer

Level 15

Expert Reviewed

Even though the penalty for taking the RMD was waived, amounts taken are still RMD until the RMD is satisfied. However, TurboTax is only asking the question to determine how much of the distribution might be eligible for rollover, but a non-spouse beneficiary is not permitted to roll over a distribution from an inherited IRA, so the entire amount distributed is RMD in the context of TurboTax's question. Further, because TurboTax already prohibits reporting a rollover of a distribution paid to a non-spouse beneficiary, it really doesn't matter what answer you provide to this question. (TurboTax really shouldn't even bother asking under these circumstances.)

MarilynG

Alumni - Intuit

Yes, you can indicate that the IRA withdrawal was RMD.

An RMD may be required for an IRA, retirement plan account or Roth IRA inherited from the original owner. The factors that affect the distribution requirements for inherited retirement plan accounts and IRAs include:

Whether the account owner died after 2019 (the SECURE Act made changes to the RMDs for beneficiaries if the death of the account holder occurred after 2019).
The relationship of the beneficiary to the account owner and certain characteristics of the beneficiary (spouse, minor child, disabled or chronically ill individual, entity other than an individual).
Whether the original account owner passed away before or after their required beginning date (the date the original account owner was required to begin taking RMDs).

The Plan Administrator has the responsibility to assure that RMD's are distributed each year, if required. So you can assume that your withdrawal included the required RMD.

Here's more info on RMD Distributions.

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