Withdrawing a late RMD

[wrstt]

I inadvertently did not take an RMD from an IRA.   I plan to ask the investment company to withdraw the amount I was required to take in 2021.  I plan to ask them to write a check to a charity rather than to me, so it will be a direct transfer and I will not take possession of the money.  If I explain why I did not take the RMD in 2021 to the IRS, will the IRS consider this a corrected RMD action and apply this withdrawal to 2021 and will I be able to avoid any taxes on this withdrawal for 2021, or will this just be considered a normal withdrawal (not an RMD withdrawal) for the year 2022) and the charity gift a regular charity gift?.   Is there a different way I can handle this situation?

[ColeenD3]

No, they will not. All you can do is request a waiver of the penalty. Your 2021 "distribution" will not be a QCD because you did not have an RMD. It will be a charitable donation, entered on Schedule A.

A missed 2021 RMD taken in 2022 is reported on the 2022 tax return along with the 2022 RMD.  Nothing goes on a 2021 tax return because there was no 2021 distribution.

Download the 5329 form from the IRS website and fill it out the same as above.  Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.

You will need to file a 5329 form and request a waiver of the penalty.  (The waiver would only be denied if there is no reasonable explanation and the missed RMD was not taken at all.)

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.

[Mike9241]

see this link for how to report for 2021

https://www.irahelp.com/slottreport/what-do-if-you-missed-your-2021-rmd 

what could not be determined is whether or not you can claim a QCD deduction on a late RMD distribution.

or if you can would it apply to 2021 or 2022.  perhaps consult with the trustee or tax pro.

it is entirely in the hands of the IRS as to whether or not to accept the waiver but not the QCD. it could treat it as a normal charitable contribution. you'll have to mail your return and provide a complete explanation of what happened  - why you didn't do a timely RMD then wait to see how the IRS responds.

[JimR]

HELP:  we did QCD for both IRAs, BUT my RMD is listed on Form 5329 line 52, WHY?

[JimR]

we did QCD for both IRAs, BUT my RMD is listed on Form 5329 line 52, WHY?

[dmertz]

Your 2021 tax return will include From 5329 Part IX requesting a waiver of the excess accumulation penalty since the distribution has now been taken.

The distribution taken in 2022 and the fact that it was done as a QCD will be reportable on your 2022 tax return, not on your 2021 tax return.  Be aware that the sum of an individual's QCDs in 2022 is not permitted to exceed $100,000.  The fact that a distribution was or was not a RMD has no bearing on whether the distribution qualifies as a QCD.  Your late-taken distribution qualifies as a QCD if you were at least age 70½ at the time of the distribution (you were) and it was paid directly to charity from your IRA (it was).