topic Re: 1099r inheritance RMD in Retirement tax questions

1099r inheritance RMD

Sam190909 — Mon, 02 Mar 2020 15:53:47 GMT

I received a 1099R for an IRA that I inherited from my Dad who passed in 2019. I selected a lump sum total distribution (code 4) in 2019, which is reflected in box 7. IRA/SEP/SIMPLE is checked off.

In Turbotax its asking if this withdrawl was an RMD?

I can then select either All was an RMD or Part was.

Later it asks if I received all, part, or not required to take an RMD

Im not sure how to respond. Any help would be greatly appreciated

Re: 1099r inheritance RMD

dmertz — Mon, 02 Mar 2020 16:10:01 GMT

TurboTax is only asking the first question as part of the information needed to determine the amount that is eligible for rollover. Since none of this distribution was eligible for rollover and none was rolled over, it doesn't matter what answer you provide to this question. Simply say it was all RMD.

For the second question, the fact that you took a distribution of the entire amount means that you satisfied any RMD that might have been required for this account. Simply say that you received all of the RMD.

Re: 1099r inheritance RMD

ColeenD3 — Mon, 02 Mar 2020 16:14:57 GMT

Yes. Answer that you did receive it.

Re: 1099r inheritance RMD

Sam190909 — Mon, 02 Mar 2020 16:44:02 GMT

Thank you. Im in State now (NJ) and Turbotax is asking is this is the first withdrawl from the IRA.

If I say Yes, it asks for Total of IRA contributions previously taxed.

If I say No, it asks about unrecovered contributions

Any help with this wold be appreciated

Re: 1099r inheritance RMD

DaveF1006 — Mon, 02 Mar 2020 19:51:37 GMT

first of all, you must determine if you have a traditional or Roth IRA.

The first question is asking what pretax contributions have you made to your traditional IRA over the years. You should have a 5498 that your trustee sent letting you know what the value of your IRA is.

Unrecovered contributions are your entire contributed to all of your Roth IRAs since you started contributing that you haven't taken out as a distribution.

The reason that the question is being taxed is to find out if your distribution is taxable or not.

Re: 1099r inheritance RMD

Sam190909 — Tue, 03 Mar 2020 14:19:47 GMT

Thanks Dave,

I inherited a regular IRA in 2019 and took a lump sum distribution as a result of a parent passing in 2019. My understanding is that the lump sum included the 2019 RMD. However, my Dad had been taking the RMD in 2018 and prior years.

Should I answer this was the first year of withdrawl, as for me it is?

Or No, made withdrawals from this account before as my Dad did in taking the RMD in prior years?

Re: 1099r inheritance RMD

dmertz — Tue, 03 Mar 2020 14:32:29 GMT

Sam190909, TurboTax does not ask that question for distributions from IRAs. It only asks that question for distributions from qualified retirement plans, indicated on the Form 1099-R by the IRA/SEP/SIMPLE box not being marked.

Assuming that this is indeed a distribution from a qualified retirement plan and not from an IRA, a lump-sum distribution is not a series of regular, periodic distributions; you should have answered No to the question that asks about periodic payments.

Re: 1099r inheritance RMD

Sam190909 — Tue, 03 Mar 2020 18:27:18 GMT

Hmmm - ok - its a 1099R and IRA/SEP/SIMPLE is checked off. Those are the questions in Turbotax State for NJ

Re: 1099r inheritance RMD

KathrynG3 — Tue, 03 Mar 2020 19:43:58 GMT

The resources below regard the change in the law December 20, 2019 from the passing of the Secure Act. These particulars do not fully apply to you because you took a 100% distribution. The commentary, however, seems to imply that the answer to your question would be that it was a first year withdrawal, as for you, even though your father had been taking the RMDs for some time.

The amount that is taxable depends on the basis of assets contributed by your father.

Additional Resources:

2019 New Jersey-1040 Instructions

2019 IRS Publication 590-B beginning on page 5 for Inherited IRAs

IRS Retirement Topics - Beneficiary

IRS Retirement Topics - Required Minimum Distributions (RMDs)

Inherited or "Stretch" Individual Retirement Accounts (IRAs) and the SECURE Act

Re: 1099r inheritance RMD

dmertz — Tue, 03 Mar 2020 20:04:04 GMT

I was commenting in regard to the questions TurboTax asks in regard to the federal tax return; I failed to see that you were asking in regard to your state tax return. I don't know why TurboTax would ask similar questions for a NJ tax return in regard to a distribution from a traditional IRA.

[Edit] The method of applying the NJ basis does seem to depend on how the distributions are made if made over several years.

Re: 1099r inheritance RMD

Sam190909 — Wed, 04 Mar 2020 15:14:16 GMT

Thank you KathrynG3,

How would I determine the basis of assets contributed by my father?

Re: 1099r inheritance RMD

lwang1 — Mon, 27 Mar 2023 03:07:34 GMT

Was this withdrawal a RMD? answered Yes, followed with Yes again. The Turbotax doesn't save it. I repeated several times. Turbotax generated form 8915F with an exclamation. It marked "X"s on 2022, and 2020. I can't do anything about it. Why? How to fix this problem?

Re: 1099r inheritance RMD

JulieS — Mon, 27 Mar 2023 14:08:05 GMT

Form 8915-F is not related to the RMD questions. Every time you go back through the 1099-R section you will be asked the RMD questions. That doesn't mean that your answer wasn't saved and it has nothing to do with your Form 8915-F.

Form 8915-F is generated from a disaster distribution from a retirement account taken in 2020 or 2021. For most people this is due to the Covid-19 disaster, but it can also be due to another federal disaster in those years.

Please try these steps to fix the rejection issue:

Select Federal on the left side menu.
Under Wages & Income, find IRA, 401(k), Pension Plan Withdrawals (1099-R).
Select Add/ Edit to the right.
Click Continue on the Review your 1099-R info screen.
Answer Yes to the Have you ever taken a disaster distribution before 2022?
Answer Yes to Did you take a 2020 Qualified Disaster Distribution?
Uncheck the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and click Continue.
On the Which disaster affected you in 2020? screen I selected the blank entry and click Back .
Then recheck the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and continue.

Another option is to delete "Form 8915-F" and "Qualified 2020 Disaster Retirement Distr" and then go back to the retirement section and reenter the information:

Open or continue your return in TurboTax.
In the left menu, select Tax Tools and then Tools.
In the pop-up window Tool Center, select Delete a form.
Select Delete next to Form 8915-F and Qualified 2020 Disaster Retirement Distr and click Continue.
Confirm your Delete.
Find Wages & Income, find IRA, 401(k), Pension Plan Withdrawals (1099-R), click Add/ Edit to the right.
Click Continue on the Review your 1099-R info screen.
Answer Yes to Did you take a 2020 Qualified Disaster Distribution?
Check the box next to If this was a Coronavirus-related distribution reported in 2020 check here, and enter your information.

Please let me know if this worked for you.

Re: 1099r inheritance RMD

lwang1 — Mon, 27 Mar 2023 19:13:15 GMT

Thanks a lot for quick, detailed response!

I am using a CD version Turbotax so the problem may not from historic data. And I've never claimed disaster related benefits (I carefully checked my previous returns). So far, only the place I can think is the 1099-Rs but it doesn't save my selections so each time I went back, it showed not selected or not the choice specified.

I'd like to be able to delete the form. However, under the Tools in my view, it doesn't have such capability, nor under the Edit tab.

I had a problem with 1031 exchange tax deferral issue for days. Yesterday, I finally figured out the form 4797 was irrelevant. I was able to remove it by emptying the fields. In the form 8915F case, no field can be edited! If it doesn't allow user to edit, how can error be corrected? I am at the final state of checking errors and I am sticking.....

Re: 1099r inheritance RMD

dmertz — Mon, 27 Mar 2023 20:26:55 GMT

The instructions for deleting a form provided by JulieS are for the online version of TurboTax. To delete a form in the CD/download version you must switch to forms mode, open the form and click the Delete button.

Re: 1099r inheritance RMD

VolvoGirl — Mon, 27 Mar 2023 20:35:08 GMT

FYI - If you edit or review a 1099R it does not keep your answers from before but resets them to the defaults. Then you have to go through and answer them all again. So be sure to go all the way to the end of the 1099R section. They are right unless you go back.

Re: 1099r inheritance RMD

lwang1 — Tue, 28 Mar 2023 02:47:17 GMT

Each time, I kept going until the end. Still, this "disaster" related distribution remained. In fact, I've never had disaster claim. You mentioned ".... it does not keep your answers from before but resets them to the defaults". I wonder what the purpose of this design is? Why some fields kept my previous selection but some, like this one won't? Imagine, one wants to review answers but once click it, all previous answers were removed, how can he/she review it?

After editing, I tried close down the Turbotax (save the changes) then restarted it. The form 8915-F is still there. Even this form should be part of my return, for this un-editable erroneous form, how may I fix it? I am totally blocked.

Would you please discuss the matter with your software engineer to see if it's potential bug? My suggestion is making the form editable and removable as form 4979.

Re: 1099r inheritance RMD

lwang1 — Thu, 30 Mar 2023 04:33:24 GMT

May I hear any update? All I needed is to remove the error caused by the form 8915F that blocked me to review and submit my return. If the form is not editable, AND your software insisted using your default answer on my RMD distribution a disaster related then what is a solution to fix my issue? Should I manually fill my return, start over? I need to get it done asap. Thanks!

Re: 1099r inheritance RMD

BrittanyS — Thu, 30 Mar 2023 13:49:04 GMT

If you have already entered your 1099-R prior to the updated form 8915-F, you may have to delete the 8915-F form and distribution and re-enter the form. Follow these steps to re-enter the distribution:

Open or continue your return in TurboTax.
In the left menu, select "Tax Tools."
Click "Tools."
In the pop-up window Tool Center, select "Delete a form."
Select "Delete" next to "Form 8915-F" and "Qualified 2020 Disaster Retirement Distr" and follow the instructions.
Click on the "Search" on the top and type “1099-R.”
Click on “Jump to 1099-R.”
If you do not have any 2022 1099-R, answer "No" to "Did you get a 1099-R in 2022?" (If you have any other 1099-R, then enter all 1099-R and after entering your last 1099-R, click "Continue" on the “Review your 1099-R info” screen)
Answer "Yes" to the "Have you ever taken a disaster distribution before 2022?" screen
Answer "Yes" to "Did you take a 2020 Qualified Disaster Distribution?"
Check the box next to "If this was a Coronavirus-related distribution reported in 2020, check here" and enter your information.

@lwang1

Re: 1099r inheritance RMD

lwang1 — Fri, 31 Mar 2023 05:44:57 GMT

Hi,

Thanks for response! Are you using online version of the software? I am using CD Turbotax and I don't see how I can do it. I replied your expert JulieS on 3/27 with a screenshot. What I see is that the menu for Tools shows only viewing the return, e.g. my tax data, summary, etc. The Edit menu has one called "delete table row". Unfortunately, nothing is clickable there, it's just a space holder.

By the way, I didn't ever create 8915F form but entered several 1099-Rs. Since some of my answers were not saved, the Turbotax used the "default value" in the form with Xs for disaster in 2020 and 2022.

Why the form 4797 was editable but 8915? Why some fields save selections but others? Inconsistent behaviors by design or bug?