topic Re: IRA RMD question in Retirement tax questions

IRA RMD question

barry wealand — Mon, 29 Mar 2021 22:25:06 GMT

In tax year 2020, I closed out an IRA that I had inherited from my father after his death in 2005. He was born in 1921. I had not taken any RMDs from this account. I received a check for the account balance, less federal and state withholding, and all of this was reported on a 1099-R.

Do I need to pay a penalty?
If so, will TurboTax do the needed calculations?
How should I navigate the data entry into TurboTax?

Re: IRA RMD question

ThomasM125 — Mon, 29 Mar 2021 23:23:33 GMT

The missed required minimum distributions (RMD) should have been reported in each year to which they applied. To correct this, you would have to amend the returns from 2015 forward to report the penalty applicable to each year.

For the current year, you would not have a penalty since you withdrew everything. So, TurboTax will not calculate a penalty for the current year, since none applies to it.

Re: IRA RMD question

dmertz — Tue, 30 Mar 2021 00:09:55 GMT

Filing Forms 5329 would mean filing these for 2006 through 2019, requesting waiver of the 50% excess-accumulation penalty on each. You would also need to file one for 2005 if your father did not complete his 2005 RMD and on other beneficiary completed his year-of-death RMD.