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Level 2
posted Feb 20, 2025 11:56:07 AM

Inherited (non IRA) Annuity

I have a 1099-R for an annuity (non IRA) distribution from my mother age 89 who died in Feb 2024. Gross Distribution $27k. Taxable amount $16K. Distribution code 4D. Turbotax wants to know if this was an RMD. How do I answer?

0 3 824
3 Replies
Expert Alumni
Mar 1, 2025 2:06:10 PM

I'm sorry for your loss.

 

If this is a 1099-R from a non-qualified annuity, it wouldn't be an RMD (required minimum payment). RMDs apply to qualified annuities and traditional retirement accounts such as IRAs and 401ks.

 

I suggest contacting the broker to confirm the kind of annuity and whether this is an RMD.

Level 2
Mar 1, 2025 5:28:39 PM

It is a non-qualified inherited annuity - not an RMD.  However, Turbotax Home and Business program has no option to indicate it is a non-qualified annuity.  The program forces you into an RMD.  The only way I could get the error cleared is to say I withdrew all of the RMD.

Expert Alumni
Mar 9, 2025 3:57:40 PM

It is okay to say you took the RMD because this is not reported to the IRS, if you indicate the RMD was not taken, it will calculate the penalty.  Hopefully this will be corrected soon.  @TXJJ