RMD: TT needs to identify the investment it is asking about

[cube1]

While doing my taxes with TT 2021 Premier, my spouse has the following situation.  She was born in 1950 (therefore, should not be required to take an RMD from her OWN IRA), but does have a beneficiary IRA inherited from her mother.  After I entered the various 1099-R forms for her beneficiary IRA and for my pension (I was born in 1951), TT prompted me as though it believed that she was required to take an RMD from her own IRA.  I *initially* chose the radio button that she is not required to take an RMD - but I have not seen that prompt before, and so it was a little surprising.   I then revisited it and realized it was likely referring to the RMD for the beneficiary IRA, but BECAUSE IT DIDN'T IDENTIFY WHICH PARTICULAR distribution  "This Retirement Plan Distribution" was referring to.  Suggest that it also include the Gross amount - otherwise for people who may have BOTH a beneficiary IRA AND their OWN IRA, it could get pretty confusing.

[AmyC]

When you enter the 1099-R forms, go through answering all the questions after each form. The RMD is one of the questions asked after form entry, along with many others. Return to the 1099-R section, revisit the inherited IRA. go through it all the way, It is most definitely an RMD.

[cube1]

Sure, in this *particular* case, it was apparent, once I thought about it.  But what if there had been MORE than one 1099-R, one which was for an RMD and one which was NOT an RMD - but for the same person.  One wouldn't be able to tell them apart.  It would not be obvious at all.

[SMHelp]

TurboTax may ask two questions about your IRA distribution and RMD's.  The first is whether the distribution you took is an RMD.  For your wife's OWN IRA, the answer to this question is "no", because she was under age 72 and the distribution was not required.  

If the distribution is required, as you say it was for the INHERITED IRA, then there is a second question as to whether the distributions equal/exceed the TOTAL AMOUNT that was required.  Some individuals may take a Required Distribution that is less than the TOTAL AMOUNT REQUIRED.  If the full RMD is not taken, Form 5329 would be added to the return to calculate the penalty owed for not taking the full amount of the RMD.

It might be easiest to delete each of the three 1099-R forms that you have already entered and then add them to the form again, making sure that you answer all of the questions about an account before moving on to the next one.  You might also find it helpful to include your initials at the end of the account name so that you can easily tell which one belongs to each of you.  I've been doing that for years without any filing problems.

Good luck.

[cube1]

Sorry, but you are *completely* missing the point.    (The other 1099-R that I had was for me, for a pension.)  Also, TT doesn't give ANY information about the account in the dialog I am referring to; just the recipient's name

[dmertz]

"TT prompted me as though it believed that she was required to take an RMD from her own IRA."

No, this question is being asked by TurboTax with respect to all of the IRAs maintained for her benefit, including the inherited IRA, from which she might be required to take an RMD.  The total RMD required is the amount from her own IRAs (none required) plus the RMD required from the inherited IRA, which I think you now understand.  If any RMD is missed, the penalty is the same and is reported the same regardless of whether she missed taking an RMD from her own IRA or an inherited IRA.  There is no need to distinguish between a missed RMD from her own IRA and a missed RMD from the inherited IRA of which she is the beneficiary.  An RMD is an RMD no matter what sort of qualified retirement account is involved.

Also note that the page that asks this does say to take into account RMDs from inherited retirement accounts.

[cube1]

Again, apparently completely missing the point.  And one CANNOT ask this just ONCE in a situation where there may be a 1099-R for a beneficiary IRA and a 1099-R (or lack thereof) for a traditional IRA.  

At our age, with her born in 1950, she is required to take the RMD from the beneficiary IRA from her *mother* born before 1949, BUT NOT FOR HER OWN IRA.  There absolutely IS A NEED TO DISTINGUISH!!!  [For a use case, she could have taken a post-retirement-age withdrawl from her OWN IRA that would NOT be an RMD, yet still have to take an RMD from the beneficiary IRA.  THEY ARE NOT LUMPED TOGETHER as you seem to be thinking.  You should read up on the law some.

I'm done here, trying to make folks truly understand why a SINGLE prompt for a given individual WITHOUT the context of WHICH IRA it may be referring to is problematic.  Typical of responses I see from Intuit and its closer adherents in more complicated situations.

Period.  The END.

[fanfare]

@cube1 

If you try to report an inherited IRA with a basis, TurboTax is going to jumble that basis history into your own IRA's basis history.

This messes up the calculation of your own IRA's tax-free portion.

TurboTax can't produce an 8606 for you and an 8606 for you as a beneficiary.,

TurboTax just doesn't handle this situation.

[cube1]

Not relevant in this particular case (no basis) - but all the more reason that TT really ought to be identifying which particular investment it is asking about in this scenario.  Good to know about the edge-case you mention, though.  Yikes.