Late RMD

[Michael_G]

I am trying to file my partner's taxes (not married filing separately). She passed away in Feb 2020. She's been taking RMD's since 2017. It looks like she reported her 2018 RMD on her 2018 return but it looks like it wasn't actually distributed to her until Jan 2019. I have the 2019 1099-R showing the distribution. Since she reported it on her 2018 return as if she received it by end of 2018 do I still need to report it on her 2019 return? I'm already reporting her 2019 distribution which she did take in 2019. I've read about form 5329 for requesting a waiver. Is that what I need to do? Do I not put the RMD on her 2019 return since she paid the tax on it in her 2018 return?

[fanfare]

are you saying you have two 1099-R for 2019, or, more likely,  one 1099-R which totals to the two RMDs you're talking about.?

[Michael_G]

She has two separate 1099-R for 2019. One she received for a distribution on 01/15/19 and another for a distribution in Oct 2019 (from two separate IRA accounts). The one though that she got in January it looks like she reported on her 2018 tax return as if she got it in 2018 when she was supposed to take the distribution. I don't know why she didn't take it until Jan 2019, forgot maybe? To not create a problem with her 2019 return I am thinking that I should report both distributions since that is when she received them and that is what the IRS will have in their records. If I do that she will owe an extra 2K or so but maybe that is what I have to do. If that is what I need to do then the question is do I need to do anything else as far as her 2018 return.

[macuser_22]

I suggest that you read the requirements for a personal representative to file for a deceased person.

IRS Pub 559 (Survivors, Executors, and Administrators) for a lot of good information about filing the final return and estate return and other requirements.
https://www.irs.gov/pub/irs-pdf/p559.pdf

A 2019 distribution cannot go on a 2018 tax return at all - only on the 2019 tax return.

If reported in 2018 then the 2018 return needs to be amended.

If no other 2018 1099-R then the only thing that should have been filed with a mailed 2018 tax return would be an attached 5329 form filled out as follows:

From 5329 instructions:
Quote:
"Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
1. Complete lines 52 and 53 as instructed.
2. Enter “RC” and the amount you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your request for a waiver. "

Line 55 would have zero tax owed.

This can only be manually filled out and mailed.

2018 5329 form - https://www.irs.gov/pub/irs-prior/f5329--2018.pdf

2018 5329 instructions - https://www.irs.gov/pub/irs-prior/i5329--2018.pdf

[Michael_G]

Thanks for that info. I did a little research in the last couple of days and I did see info about the form 5329. So it sounds like you are saying I DO need to include the Jan distribution on the 2019 return since it was in 2019. Since we did our taxes separately I didn't look at what she was doing and assumed she was doing things correctly. I don't know what her thinking was and unfortunately I can't ask her now. I don't know if it was ignorance on her part that she thought she could still report it on her 2018 return. I don't think she was intentionally doing something she new was wrong. Since she didn't file the return with the 5329 included I guess you are saying that I need to amend the 2018 return AND also file the 5329 as well. If I amend the return I would think she should get a refund since she paid tax on a distribution she didn't get and therefore the amended return should show less tax.

[macuser_22 · Accepted solution]

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@Michael_G wrote:

Thanks for that info. I did a little research in the last couple of days and I did see info about the form 5329. So it sounds like you are saying I DO need to include the Jan distribution on the 2019 return since it was in 2019. Since we did our taxes separately I didn't look at what she was doing and assumed she was doing things correctly. I don't know what her thinking was and unfortunately I can't ask her now. I don't know if it was ignorance on her part that she thought she could still report it on her 2018 return. I don't think she was intentionally doing something she new was wrong. Since she didn't file the return with the 5329 included I guess you are saying that I need to amend the 2018 return AND also file the 5329 as well. If I amend the return I would think she should get a refund since she paid tax on a distribution she didn't get and therefore the amended return should show less tax.

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That is all correct.  A 2019 distribution cannot go on a 2018 tax return.  If entered then remove it and a refund should be coming.  Also attach the 5329 to the amended  2018 return.  Attach an explanation that the late RMD was taken in 2019.

Enter both 2019 1099-R on a 2019 return.