RMD for non-qualified annuities?

Forum|Forum|6 years ago
June 8, 2020
9 replies
79 views

My 94 year old dad is receiving several annuity payments from non-qualified annuities to pay for his care. He is NOT required to take these payments under contract and they are NOT lifetime annuity payments. We requested the amount of payout and it is not tied to any RMD amount that I know of. How do I answer TT's RMD question for these annuity payments? They were initially paid for with after-tax money and are not part of an IRA, SEP, 401k, etc.

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macuser_22

Alumni - Champ

Non-qualified annuities that should have a code D in box 7 on the 1099-R will not ask about RMD's.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

dmertz

Level 15

Actually, even though it shouldn't, TurboTax does ask if a code 7D distribution is an RMD. However, TurboTax only asks this question to determine how much of the distribution is eligible for rollover to a qualified retirement plan, and, since none of a code 7D distribution is eligible for rollover, it doesn't matter how you answer this question. The code D will prevent TurboTax from asking what you did with the money regardless of how you answer this question.

TurboTax even goes on to ask if the code 7D distribution is a qualified disaster distribution, even though a qualified disaster distribution can only come from a qualified retirement account, and will flag the code 7D Form 1099-R as erroneous if you inadvertently answer that it was a qualified disaster distribution. Just one of several the traps for the unwary in TurboTax's form 1099-R section where the developers didn't quite think things through and unnecessarily creates a situation where the user can make an entry error.

macuser_22

Alumni - Champ

Yea, the code 7 probably does that. A code D by itself does not ask the question.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**