Successor Beneficiary - Missed RMD and Amended Return

[Confused_Successor]

Hi - I am a successor beneficiary of an inherited IRA. 

The original owner passed in 2014. The beneficiary passed in 2019. 

I took the RMD in 2019. I did not take it in 2020 due to suspended requirements for the pandemic.

In 2021, my financial advisor advised the wrong amount and did not withdraw enough.

In 2022, my financial advisor sent a letter that they were taking the distribution but did not.  I had spoken to them about setting it up to automatically distribute, which I also thought they did. They subsequently sent a letter stating they were terminating being my advisor due to their own business realignment. 

In 2023, there was no distribution taken. 

In 2024, I realized that I was remiss in RMDs and contacted the firm with the IRA. I received 3 separate distribution transactions for the delta of 2021, for 2022 and 2023. I had them take out an estimated tax withholding. 

My question: Do I submit the 5329 form for all three years with my 2023 taxes (I have an extension), and therefore use my 2023 tax rate... or do I need to submit amended returns and a 5329 form separately for 2021 AND again for 2022? 

I understand that I will have to explain why the RMD was missed and pray that I do not have to pay a penalty.

[dmertz]

Separate from your 2023 tax return you'll need to submit 2021, 2022 Forms 5329 requesting waiver of the excess accumulation penalties for those years.  You can send each of these with a corresponding Form 1040-X, but the Form 1040-X will serve only as a place to provide your explanation and signature.  There will be no changes to what you already filed for your tax returns for these years.  Your 2023 tax return will need to include 2023 Form 5329 also requesting waiver of the 2023 excess accumulation penalty.

These distributions that you received in 2024 will be includible in income on your 2024 tax return.  They are not includible in income on your 2021, 2022 or 2023 tax returns.  You'll also have taken the RMD for 2024 before the end of 2024 and the total of all of these distributions will be reported on a single 2024 Form 1099-R.

[Confused_Successor]

Thank you so much! This is incredibly helpful.

[fanfare]

The proper way to file Form 5329 is attached to Form 1040-X.
Form 5329 can be mailed by itself only when you are otherwise not required to file a tax return.

Get Form 1040-X from IRS website and mail it in with your 5329 which you can also get in editable PDF.
Note: When you are not changing any dollar amounts on your amended tax return, you can leave all the lines 1-23 EMPTY.

Part III explanation: will explain to the IRS why you missed the RMD, what action you took that they should waive your penalty. This is required if you request a waiver. Include dates and amounts.

(what you posted here may be sufficient; if IRS finds it "reasonable").

You must use the 20NN Form 5329 for amending year 20NN.

@Confused_Successor