2013 Form 5329?
My dad, who died in 2013 at the age of 75, did not have a beneficiary listed on his IRA. The bank put the IRA in the name of the estate. In 2014 the bank issued a RMD in the name of the estate before switching the account into my name. When I questioned why it was so large, they told me it included his 2013 & 2014 distribution. They told me they were not able to send the 2013 RMD until the state of NJ said it was ok. In researching this now, I see we can be subject to a 50% penalty on the distribution not taken. I also see we can request a waiver on Form 5329. Can we do this even though the 2013 estate tax return was already filed? Can we file an amended return to do this? This has been a nightmare from the beginning and can only recommend that everyone complete a beneficiary form to avoid these problems.
Permalink Submitted by Alan - IRA critic on Wed, 2015-03-25 23:42
The bank should not have issued any of these RMDs without authorization of the executor of the estate. The 2013 year of death RMD must be distributed, but how does the bank know whether your Dad owned another IRA and completed the RMD from that other IRA? Likewise, the 2014 inherited IRA RMD could have been deferred for you to take instead of the estate. Probably not worth worrying about that now. The 5329 for 2013 must be filed with the 1041 for the estate, so that means an amendment. With the “reasonable cause” explanation the estate has, the IRS is very likely to waive the 50% penalty. Send evidence that the 2013 RMD was distributed, such as copy of the distribution statement.. Your final sentence is very true, as the worth beneficiary for an IRA is the estate.