Late Required Minimum Distribution
I have a client that turned 70 1/2 in 2010 and submitted his first Required minimum distribution on March 23, 2011, just before the required first distribution date of April 1st, however the company did not process the request until April 6th. Is my client going to have a 50% penalty on this distribution or is there some sort of exception available?
Permalink Submitted by Alan Spross on Fri, 2011-04-08 16:58
Under those circumstances, there is an excellent chance the IRS would grant a waiver. A Form 5329 should be completed with the 2011 tax return and the Instructions on p 6 of the 5329 Inst should be followed in requesting the waiver for “reasonable cause”. Client should be sure to take their 2011 RMD this year as well or it might reduce the chance of the waiver being granted.