Missed RMD
Regarding an Inherited IRA, just noticed a miscalculated RMD for 2015; less than required amount ($1,000).
Going to contact the custodian shortly.
Options available ??
Regarding an Inherited IRA, just noticed a miscalculated RMD for 2015; less than required amount ($1,000).
Going to contact the custodian shortly.
Options available ??
Permalink Submitted by Alan - IRA critic on Thu, 2016-01-14 16:26
Make up the shortfall ASAP with a separate distribution. When the record appears on your account statement, make a copy of the statement highlighting the distribution. Then file Form 5329 with your 2015 tax return completing lines 50-53 showing 0 on line 53 and “RC” for reasonable cause for the delinquency next to line 52 with the delinquent RMD amount on line 52. Then include an explanatory statement for the reasonable cause with your return. IRS will probably waive the penalty. You will be taxed on only the amount you received in 2015 and the makeup distribution will be taxed in 2016.
Permalink Submitted by tomd37 on Thu, 2016-01-14 16:43
Alan – When completing the tax return using a tax software program, can the “RC” be entered in the software? Since an explanatory statement has to be included I assume the return would have to be mailed and also because it requires manual processing by the IRS for the exception. Tom D.
Permalink Submitted by Alan - IRA critic on Sat, 2016-01-16 02:26
Tom, not sure but I think most tax programs provide fields to enter the RC for the 5329. If not, the taxpayer could consider e filing the return without the 5329 and then sending a paper 5329 with the RC and perhaps copy of the makeup distribution statement shortly afterwards.