1099-R

[MattR228]

My wife received a 1099-R for money she received from her deceased grandmother.  My wife is still alive.  I'm getting the question asking, "When was this person born?"  Does this mean my wife or her deceased grandmother?

[jtax]

I assume that the 1099-R is in your wife's SSN and name (perhaps as beneficiary of her grandmother). If not let us know. If you do so tell us the code(c) in Box 7 and if the IRA/SIMPLE box is checked.

The DOB TT is looking for is the original owner (grandmother) not the beneficiary (your wife).

Did you answer that TT that was inherited? If so TT should ask you for the first name and year of death from her grandmother. Then TT use that name when it asks you the DOB question. The question is about the original owner of the IRA/401k/pension. 

I think TT is asking this because if the original owner was old enough, she would have had to take out a required minimum distribution. If she passed away before doing so in her last tax year, then your wife needed to take out that RMD. TT will ask questions about that. 

If there is still money in the IRA/401k/pension account then your wife will need to take out required distributions. Ask your financial institution about that but after the SECURE act it generally must come out within 10 years with certain exceptions. Also the IRS has also just taken the position that annual amounts must be taken based on the age of the beneficiary. That might change.

a screen shot from TT desktop (I answered that it was inherited from a non-spouse named sue who died in 2021:

[MattR228]

1099-R is in my wife's name and SS#.  Distribution code in box 7 is 4.  The IRA/SEP/SIMPLE box is not checked.  After the Tell us When This Person was Born page (entered grandma born before date given), next page was titled About This Inherited Retirment Account.  TT did not ask for the name of deceased or year of death (she died in 2021).  As far as the RMD goes, this was just a one-time payment to my wife.  Should my wife just call the company and ask if this was considered an RMD?

Thanks.

[jtax]

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@MattR228 wrote:

 About This Inherited Retirment Account.  TT did not ask for the name of deceased or year of death (she died in 2021). 

Hmm. Not sure why you are seeing different questions.

As far as the RMD goes, this was just a one-time payment to my wife.  Should my wife just call the company and ask if this was considered an RMD?

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OK. This is a simple case. If your wife withdrew all of the account then the answer to the RMD question doesn't really matter. 

TT is asking about the RMD for a couple of reasons that don't matter for you. 1. to make sure that RMD's were taken if required (otherwise there is a huge penalty). 2. if you took an RMD you can't roll it over to a different financial institution. But since your wife took it all out #1 doesn't matter and because if your wife didn't roll it over it shouldn't matter #2 doesn't apply.

Just be sure the withdrawal shows up on your 1040 line 5a and after subtracting any non-deductible contributions made by her grandmother on line 5b.