The biggest problem is the potential penalty – 50% of the missed amount. This is what you do:

1. Calculate the missed RMD based on the single life table and using the 12/31/12 balance. The starting point on the single life table is the beneficiary’s age in the year after the original owner’s death – the factor is reduced by 1.0 for suceeding years.
2. Actually take the distribution out of the inherited IRA.
3. If the 2013 return is on extension, attach Form 5329 – you need the last section on page 2. Show the amount that was supposed to be taken. Put zero on the penalty line and write “waiver request” to the left of that line.
4. The waiver request should state that the missed RMD has been taken and give a reason it didn’t happen in 2013. Perhaps they were confused regarding the requirements or ill or relied on financial advisor who didn’t perform.
5. If the 2013 return has already been filed, Form 5329 (with the explanation attached) can be filed directly with the IRS campus where they file. The taxpayer must sign the form and if a preparer helps them, the preparer must sign as well.
6. When calculating the 2014 RMD, make NO adjustments for the missed 2013 RMD.

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