Inhertied IRA 1099-R reporting

[yunch]

My wife inherited an IRA from her cousin (Non-spouse).  She is age 70 and was required to take a Required Minimum Distribution (RMD) in 2021.  After entering the 1099-R information in Turbo Tax 2021, the program asks for the first name and date of death of the person from whom she inherited the IRA.  Next, it asks when the person was born.  When I check that her cousin was born after July 1, 1947, the program will not jump to the screen asking if the withdrawal was a Required Minimum Distribution (RMD).   Is it OK to override the program by falsely indicating that her cousin was born before to June 30, 1947 in order to allow the program to jump to the screen asking about the inherited IRA and whether the withdrawal was an RMD.

[RobertB4444]

Yes, that is ok.

But it's really unnecessary. 

Whether it is an RMD or not doesn't change how much tax is owed on it.  And inherited IRAs have different distribution rules.  Just make sure that the amount that she received is on the return and you should be all set.

This is the IRS rules on Inherited IRAs. 

[fanfare]

why do you want to trick TurboTax with false information into doing possibly wrong calculation on your tax return ??

[Opus 17]

The cousin‘s birthday is important because it helps to determine whether your wife is an eligible or not an eligible designated beneficiary.    If your wife is more than 10 years younger than the original account owner, then your wife is not an eligible beneficiary. That means she must follow the 10 year rule rather than the RMD rule.  She must spend the account to zero and close it within 10 years of inheriting it, but does not have any annual requirement other than that.

If your wife is less than 10 years younger than the cousin, then your wife is an eligible designated beneficiary and she may withdraw on any schedule and keep the account longer than 10 years if she wants to, but she must withdraw at least her RMD amount each year.

[Opus 17]

@RobertB4444 

I believe that IRS page is out of date. It refers to age 70-1/2 for RMDs instead of age 72-1/2, and it refers to a 5 year rule instead of a 10 year rule. It appears that it has not been updated for the SECURE act.  

In this case, it appears that which rule the wife is covered by depends on the age difference between the wife and the cousin, which is why TurboTax is asking for the birthdate.

Eligible designated beneficiaries.

An IRA beneficiary is an eligible designated beneficiary if the beneficiary is the owner's surviving spouse, the owner's minor child, a disabled individual, a chronically ill individual, or any other individual who is not more than 10 years younger than the IRA owner.

If the owner died on or after his or her required beginning date (defined earlier), and you are an eligible designated beneficiary, you must base required minimum distributions for years after the year of the owner's death on the longer of:

• Your single life expectancy shown in Table I in Appendix B, as determined under Beneficiary an individual later; or

• The owner's life expectancy as determined under Death on or after required beginning date under Beneficiary not an individual later.

•  

Designated beneficiary who is not an eligible designated beneficiary.

Distributions to a designated beneficiary who is not an eligible designated beneficiary must be completed within 10 years of the death of the owner. See 10-year rule, later.