I inherited an IRA last year, but no RMD from it. I did receive a 1099-R for the entire IRA that I inherited. Do I need to report this?

[CathiM]

If you inherit IRA assets from someone other than your spouse, you generally have two options from which to choose: direct transfer of the IRA to a special type of IRA called an inherited IRA, or take cash distributions as taxable income. If you receive a check, the money will be taxed as ordinary income, and is ineligible to be deposited into an inherited IRA you may own at another firm. Also, once you take a check it cannot be deposited back into the inherited IRA that it was withdrawn from to begin with.

It doesn't sound like you chose direct transfer to an inherited IRA. Those assets must be transfered directly from one account to another or from one IRA custodian to another. There is no option for a 60-day rollover when inheriting IRA assets. 

Generally, the deadline for beginning RMDs from an Inherited IRA is December 31 of the year following the original owner's death. The RMD amount is distributed to you as beneficiary in the year of death and must be based on the original owner's RMD schedule but is distributed under your tax ID number.

[raelfenbein]

Thanks for your response. I received the IRA from my father after he died last year. He received his RMD from the IRA last year before he died, so I was not eligible for a RMD last year. However, the firm sent me a 1099-R with the total value of the IRA in Box 1 and the taxable amount as zero (because I received no money from the IRA last year) in Box 2a. Do I need to report this to this IRS, as I received no money from this account?

[dmertz]

Yes you must report the 2017 Form 1099-R on your 2017  tax return.

t sounds like this was not an IRA but was instead a different type of retirement account.

What is the code in box 7 of the Form 1099-R?
Is the IRA/SEP/SIMPLE box marked?

[raelfenbein]

That box is not marked. It was a 403(B7) Plan rolled over to an IRA. I received no RMD from it last year, but still got a 1099-R. Do I need to report this form to the IRS, even though the taxable amount is zero?

[fanfare]

What is the code in box 7 of the Form 1099-R?

[raelfenbein]

4G

[dmertz]

This is a direct rollover from the 403(b) to the inherited IRA.  Yes, it is reportable on your tax return, but TurboTax will treat it as nontaxable since the amount inbox 2a is zero.  In the follow-up to entering this form, be sure to indicate that it was not rolled over to any type of Roth account.  The gross amount will be included on Form 1040 line 16 a or Form 1040A line 12a but none of it will be included on line 16b or 12b.  TurboTax will also include the work ROLLOVER next to the line.

[raelfenbein]

Thanks for the response. I already submitted my taxes, then I found this form. Do I need to amend my taxes then?

[dmertz]

It's probably unnecessary to amend your tax return because the code 4g with a zero box 2a already indicates that you made a nontaxable rollover and the 2017 Form 5498 that will be issued by the inherited IRA will show the rollover contribution.  However, be sure to retain all documentation necessary to support the position that the distribution was properly rolled over in case the IRS questions whether or not the rollover was actually completed.  Some people manage to divert the distribution to an account other than a proper inherited IRA, so, absent recognition that the Form 5498 indicates that the rollover was completed, the IRS might assume that the rollover was not completed and the gross amount is subject to taxation.

[raelfenbein]

Thanks so much for answering my questions