How do I fill out form 5329 for missed RMD for deceased father?

[mplsjanedoe]

My father missed his 2015 RMD due to illness and passed away before the end of the year.  His account is now set up as a Ben IRA in my name.  I am requesting the RMD from 2015 be distributed to me this year in April of 2016.  Do I claim the RMD dist on my personal 2015 return as income even though I am taking it in 2016 and do not have a 1099 form?  Where would I claim it?  and do I file the form 5329 with my taxes as well?   or does this all get claimed on his 2015 tax return?

[RichardG · Accepted solution]

You should report the missed RMD on your late father's final return by filing Form 5329, Part IX.  There is no interview in TurboTax for missed RMDs in the program, so you'll need to prepare the document in forms mode.  If you're not familiar with working in forms mode, please let me know and I'll point to some instructions for that.

Fortunately, you can request a waiver from the penalty, and the IRS has historically been generous in granting the waiver.  Please read the instructions to Form 5329 for more information.  https://www.irs.gov/pub/irs-pdf/i5329.pdf

Since you won't receive the payment until this year, you should not report it on your 2015 tax return.  You may also need to take your own RMD this year, which is separate from your father's 2015 RMD.

[mplsjanedoe]

Thank you TurboTaxRichardG for the reply.  Just to be clear, I am filing the form 5329 with my deceased father's 2015 return and not doing anything with my own return until I file for 2016?  I would claim the RMD that I am taking from the account that was previously his in 2016, so will get a form 1099 to use for my 2016 taxes?  Just curious how the 5329 form I file with my father's 2015 taxes gets connected to the missed 2015 RMD that I am taking under my own name and caiming on my own taxes next year?

[RichardG]

You have the process down correctly.  Because you used forms mode to create Form 5329, it's likely you won't be allowed to e-file your father's return.  Just mail it in if that happens.  It's common for a taxpayer to die before taking a RMD for the year and the beneficiary winds up taking the distribution,  Presumably the IRS has a way of tracking this.

[dmertz]

Since it immediately becomes the responsibility of the beneficiary to complete the deceased's year-of-death RMD upon the death of the decedent (and is taxable income to the beneficiary), the Form 5329 requesting the waiver must be included with the beneficiary's tax return, not the deceased's final tax return.  It's the beneficiary, not the decedent, who is subject to the penalty if the RMD is not completed.

[mplsjanedoe]

I have received 2 different answers here.  How do I know which answer is correct?  One states that I file a form 5329 with my deceased fathers return for 2015 and the other states that i file the form 5329 with my own return.  Both make sense I guess, so that much more confusing.  If I file with my own return and not with my father's return, do i file it with my 2015 return even though I am not taking the 2015 RMD until 2016?  Or do I file the form 5329 with my 2016 return because that the year I received the money from the 2015 RMD?

[dmertz]

Yes, the Form 5329 requesting the waiver must be filed with your 2015 tax return.  This distribution will be reported on your 2016 tax return.  Keep in mind, if the IRS wants to impose the 50% excess accumulation penalty, you are the one who will receive the deficiency notice since the responsibility to complete the RMD became yours as beneficiary.

[mplsjanedoe]

I think I got it now.
1.  I do not file anything with my father's taxes for the missed RMD for 2015.  I do not file the form 5329 with his taxes at all.
2.  I will take the 2015 RMD in 2016, paid to myself.
3.  I will NOT claim the money I received in 2016 from the RMD on my 2015 tax return
4.  I will however file the form 5329 with my 2015 tax return even though I did not get the RMD until 2016
5.  I will not claim the income until I file my 2016 tax return next year when I receive an actual 1099 form
6.  I will not file an additional form 5329 next year because I already filed it this year with my 2015 return
8.  I will mail in everything instead of e-filing and will not have have to do anything with this next year except claim the income from the 2015 RMD on my 2016 return because I received it late.

[dmertz]

That's it.  Of course your 2016 tax return will also include the income from *your* 2016 RMD from this account and any other distributions you might take.   The 2016 Form 1099-R will show the total of the distributions taken from this account in 2016.