How to handle reporting of RMD on deceased mother's 1040

[petfactory]

My mother passed away in May of 2022. She had no property and all of her investments had beneficiaries, so no estate income was created and no probate was necessary.  

She had an IRA of which my sister and I were beneficiaries. She had taken a partial RMD for 2022. My sister and I each received our half of the IRA funds and each took our portion of the remaining required 2022 RMD.  Because of her medical expenses and investments, I will be filing a personal 1040 on her behalf for 2022.

My question is how do I report the RMD on her 1040?

Do I enter her amount of RMD, check the box ‘I received all the RMD for 2022’ and complete a Form 5329-T Waiver of Tax with an explanation that my sister and I took the remaining RMD?

Or is there some other process I should be following?

[JohnB5677 · Accepted solution]

My question is how do I report the RMD on her 1040?

• It should be posted to the individual whose SSN is on the 1099-R.

Do I enter her amount of RMD, check the box ‘I received all the RMD for 2022’ and complete a Form 5329-T Waiver of Tax with an explanation that my sister and I took the remaining RMD?

• Yes!
• To post a 5329
  • Down the left side of the screen, click on Federal.
  • Across the top of the screen, click on Other tax situations.
  • Scroll down to Additional Tax Payments.
  • Click on Start  / Revisit on Extra tax on Extra tax on early retirement withdrawals.

Or is there some other process I should be following?

The rules for inheriting an IRA.   The heir must take the RMD for the year the account owner died. The full RMD must be taken by December 31 in the year the account owner died, even if he or she died at the beginning of the year. 

All distributions are taxable to the taxpayer and their heirs, unless they are from a ROTH account. Generally, a beneficiary reports pension or annuity income in the same way the plan participant would have reported it. 

To take the RMD, beneficiaries must contact the custodian of the account and submit a death certificate. If the account owner died before he or she was required to begin distributions, then the beneficiaries do not need to take an RMD. 

The money from the RMD will go directly to the beneficiary listed on the account, not the estate. That means it will be taxable income for the beneficiary. If there is more than one beneficiary, it will be split evenly. 

[pmur70]

The TurboTax guidance on this appears incorrect or outdated. The steps listed in the answer do not lead to the 5329 form. It also does not appear correct for a tax penalty to be assessed and then file for a waiver. The applicable tax forms (e.g. 540 SR) do not ask the filer to input the RMD amount, only the distributions, so Turbotax may be making this much more complicated than it needs to be.

[MarilynG1]

If you received a 1099-R for a IRA retirement plan distribution, and are required to take an annual RMD, when entering the 1099-R, you'll be asked if part/all of this distribution is RMD.

Choose YES, and for the amount of the required RMD, enter an amount equal to or less than the distribution amount in Box 1.

You will then not incur a penalty, and are indicating that you withdrew the required RMD for 2024.

The IRS allows RMD's to be taken from one or several accounts, and expects that you and/or your plan manager will calculate this correctly.

Here's more info in IRS Requirements for RMD's.

@pmur70