Missed RMD due to illness
An IRA account owner was very ill at the end of 2007 (subsequently died this month) and did not take his 2007 rmd, he was 89. The account is not that large and the beneficiary will take a full distribution of the account in 2008 and satisfying the 2008 reqirement. Is there any way to make the 2007 distribution now and report it on the 2007 1040 w/ an explanation, or is there a recommended course of action?
Permalink Submitted by Alan Spross on Tue, 2008-02-26 18:49
Yes, under the circumstances the IRS should be willing to excuse the penalty. Form 5329 should be filed with decedent’s 2007 return with an explanation of the situation and indicating that a full distribution of the account was taken in 2008 by the beneficiary.
See p. 6 of the 5329 Inst. for completion instructions including the new “RC” on line 52 of Form 5329.
Permalink Submitted by Alan Spross on Tue, 2008-02-26 18:57
The “RC” stands for “reasonable cause”.
Right now the interpretation of what is reasonable is very broad. Health problems of the owner are very viable reasons.