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Level 3

RMD 1099-R shows as Total Distribution

Prior to his death, my husband took his RMD from his IRA. I inherited his IRA and had the balance transferred into an IRA at the same financial institution, but under my SSN.  The 1099-R issued for the RMD and under his SSN shows this as a Total Distribution (ie. both boxes in 2b are checked).

 

The RMD distribution shown on the 1099-R was not a total distribution that closed out his account.  His IRA balance was transferred to my IRA several months later.

 

Is this 1099-R correct (doesn't seem right) or should I ask for a corrected 1099-R?

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Level 15

RMD 1099-R shows as Total Distribution

The marking of box 2b Total distribution is relatively meaningless to the IRS when the distribution is from an IRA and has no bearing on your tax return.  In this case, the total distribution indication simply means that your husband's IRA had a zero balance at year-end, so the marking of this box on the Form 1099-R is fine in this respect.

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Expert Alumni

RMD 1099-R shows as Total Distribution

Box 1 could have the total distribution but box 2 should only have his RMD. Because it was transferred to you, there was a total distribution but it was not a taxable event.

 

You may want to print from the IRS rules. link and take it to the bank.

 

Required minimum distributions after the account owner dies

For the year of the account owner’s death, use the RMD the account owner would have received. For the year following the owner’s death, the RMD will depend on the identity of the designated beneficiary.

Calculating required minimum distributions for designated beneficiaries

Beneficiaries of retirement accounts and IRAs calculate RMDs using the Single Life Table (Table I, Appendix B, Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)). The table shows a life expectancy based on the beneficiary’s age. The account balance is divided by this life expectancy to determine the first RMD. The life expectancy is reduced by one for each subsequent year.

  • Spouses who are the sole designated beneficiary can:
    • treat an IRA as their own, or
    • base RMDs on their own current age,
    • base RMDs on the decedent’s age at death, reducing the distribution period by one each year, or
    • If the account owner died before the required beginning date withdraw the entire account balance by:
      • the end of the 5th year following the account owner’s death  if the account owner died in 2019.
      • the end of the 10th year following the account owner’s death if the account owner died in 2020 or later years.

I am so very sorry for your loss, best wishes.

 

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Highlighted
Level 15

RMD 1099-R shows as Total Distribution

The marking of box 2b Total distribution is relatively meaningless to the IRS when the distribution is from an IRA and has no bearing on your tax return.  In this case, the total distribution indication simply means that your husband's IRA had a zero balance at year-end, so the marking of this box on the Form 1099-R is fine in this respect.

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Level 3

RMD 1099-R shows as Total Distribution

Amy:  None of the mutual fund companies consider the transfer of my deceased husband's IRA balance to my IRA at the same institution as a reportable event and none are issuing 1099-R for these transfers.  There is no question about the RMD being correctly handled; only the checking of box 2b.  If this doesn't impact my taxes or create an issue with the IRS, then I don't care.