1099r inheritance RMD

[Sam190909]

I received a 1099R for an IRA that I inherited from my Dad who passed in 2019.  I selected a lump sum total distribution (code 4) in 2019, which is reflected in box 7. IRA/SEP/SIMPLE is checked off.

In Turbotax its asking if this withdrawl was an RMD?  

I can then select either All was an RMD or Part was.

Later it asks if I received all, part, or not required to take an RMD

Im not sure how to respond.  Any help would be greatly appreciated

[dmertz · Accepted solution]

TurboTax is only asking the first question as part of the information needed to determine the amount that is eligible for rollover.  Since none of this distribution was eligible for rollover and none was rolled over, it doesn't matter what answer you provide to this question.  Simply say it was all RMD.

For the second question, the fact that you took a distribution of the entire amount means that you satisfied any RMD that might have been required for this account.  Simply say that you received all of the RMD.

[ColeenD3]

Yes. Answer that you did receive it.

[Sam190909]

Thank you.   Im in State now (NJ) and Turbotax is asking is this is the first withdrawl from the IRA.

If  I say Yes, it asks for Total of IRA contributions previously taxed.  

If I say No, it asks about unrecovered contributions

Any help with this wold be appreciated

[DaveF1006]

first of all, you must determine if you have a traditional or Roth IRA. 

The first question is asking what pretax contributions have you made to your traditional IRA over the years. You should have a 5498 that your trustee sent letting you know what the value of your IRA is.

Unrecovered contributions are your entire contributed to all of your Roth IRAs since you started contributing that you haven't taken out as a distribution.

The reason that the question is being taxed is to find out if your distribution is taxable or not.

[Sam190909]

Thanks Dave,

I inherited a regular IRA in 2019 and took a lump sum distribution as a result of a parent passing in 2019.  My understanding is that the lump sum included the 2019 RMD.  However, my Dad had been taking the RMD in 2018 and prior years.

Should I answer this was the first year of withdrawl, as for me it is?

Or No, made withdrawals from this account before as my Dad did in taking the RMD in prior years?

[dmertz]

Sam190909, TurboTax does not ask that question for distributions from IRAs.  It only asks that question for distributions from qualified retirement plans, indicated on the Form 1099-R by the IRA/SEP/SIMPLE box not being marked.

Assuming that this is indeed a distribution from a qualified retirement plan and not from an IRA, a lump-sum distribution is not a series of regular, periodic distributions; you should have answered No to the question that asks about periodic payments.

[Sam190909]

Hmmm - ok - its a 1099R and IRA/SEP/SIMPLE is checked off.  Those are the questions in Turbotax State for NJ

[KathrynG3]

The resources below regard the change in the law December 20, 2019 from the passing of the Secure Act. These particulars do not fully apply to you because you took a 100% distribution. The commentary, however, seems to imply that the answer to your question would be that it was a first year withdrawal, as for you, even though your father had been taking the RMDs for some time. 

The amount that is taxable depends on the basis of assets contributed by your father. 

Additional Resources:

2019 New Jersey-1040 Instructions

2019 IRS Publication 590-B beginning on page 5 for Inherited IRAs

IRS Retirement Topics - Beneficiary

IRS Retirement Topics - Required Minimum Distributions (RMDs)

Inherited or "Stretch" Individual Retirement Accounts (IRAs) and the SECURE Act

[dmertz]

I was commenting in regard to the questions TurboTax asks in regard to the federal tax return; I failed to see that you were asking in regard to your state tax return.  I don't know why TurboTax would ask similar questions for a NJ tax return in regard to a distribution from a traditional IRA.

[Edit]  The method of applying the NJ basis does seem to depend on how the distributions are made if made over several years.

[Sam190909]

Thank you KathrynG3,

How would I determine the basis of assets contributed by my father?

[lwang1]

Was this withdrawal a RMD? answered Yes, followed with Yes again. The Turbotax doesn't save it. I repeated several times. Turbotax generated form 8915F with an exclamation. It marked "X"s on 2022, and 2020. I can't do anything about it. Why? How to fix this problem?

[JulieS]

Form 8915-F is not related to the RMD questions. Every time you go back through the 1099-R section you will be asked the RMD questions. That doesn't mean that your answer wasn't saved and it has nothing to do with your Form 8915-F. 

Form 8915-F is generated from a disaster distribution from a retirement account taken in 2020 or 2021. For most people this is due to the Covid-19 disaster, but it can also be due to another federal disaster in those years.

Please try these steps to fix the rejection issue:

1. Select Federal on the left side menu.
2. Under  Wages & Income, find IRA, 401(k), Pension Plan Withdrawals (1099-R).
3. Select Add/ Edit to the right.
4. Click Continue on the Review your 1099-R info​​​​​​​ screen.
5. Answer Yes to the Have you ever taken a disaster distribution before 2022? 
6. Answer Yes to Did you take a 2020 Qualified Disaster Distribution?
7. Uncheck the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and click Continue.
8. On the Which disaster affected you in 2020? screen I selected the blank entry and click Back .
9. Then recheck the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and continue.

Another option is to delete "Form 8915-F" and "Qualified 2020 Disaster Retirement Distr" and then go back to the retirement section and reenter the information:
 

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, select Delete a form.
4. Select Delete next to Form 8915-F and Qualified 2020 Disaster Retirement Distr and click Continue.
5. Confirm your Delete.
6. Find  Wages & Income, find IRA, 401(k), Pension Plan Withdrawals (1099-R), click Add/ Edit to the right.
7. Click Continue on the Review your 1099-R info​​​​​​​ screen.
8. Answer Yes to Did you take a 2020 Qualified Disaster Distribution?
9. Check the box next to If this was a Coronavirus-related distribution reported in 2020 check here, and enter your information.
   
   Please let me know if this worked for you.
    

[lwang1]

Thanks a lot for quick, detailed response!

I am using a CD version Turbotax so the problem may not from historic data. And I've never claimed disaster related benefits (I carefully checked my previous returns). So far, only the place I can think is the 1099-Rs but it doesn't save my selections so each time I went back, it showed not selected or not the choice specified.

I'd like to be able to delete the form. However, under the Tools in my view, it doesn't have such capability, nor under the Edit tab. 

I had a problem with 1031 exchange tax deferral issue for days. Yesterday, I finally figured out the form 4797 was irrelevant. I was able to remove it by emptying the fields.  In the form 8915F case, no field can be edited! If it doesn't allow user to edit, how can error be corrected? I am at the final state of checking errors and I am sticking..... 

[dmertz]

The instructions for deleting a form provided by JulieS are for the online version of TurboTax.  To delete a form in the CD/download version you must switch to forms mode, open the form and click the Delete button.