Inherited IRA’s RMD obligation
Found that the custodian, Pershing, of inherited IRA’s is not notifying beneficiaries of amount of RMD they must take on their stretch inherited IRA’s and has not done so for several years.
What is the penalty for this and is it advised to reach back and take the RMD’s for all those years?
Permalink Submitted by Jose Morales on Wed, 2015-05-27 16:04
The Custodian has no obligation to notify beneficiaries of the amount of their RMD, or even determine if they have any RMD amount to take at all. In fact, in the even an inherited IRA was transferred to them from another IRA Custodian, it would be impossible for them to do so. The responsibility for determinine if an RMD must be taken and the amount if so is solely on the beneficiary themselves. The penalty for not having taken an RMD if one was required is 50% of the amount that should have been taken. You would report this penalty using form 5329. You can also ask the IRS for a waiver of the penalty with this form.