RMD check not cashed
I received my 2017 RMD check in late December of 2017 but never cashed it. It is now a stale check and the brokerage account won’t cash it. They are telling me that if they reissue the check it will not count as a 2017 distribution received in 2017. I already received a 1099-R in 2017 for the distribution and reported the income on my 2017 tax return. If I have the check reissued, am I subject to late penalties in 2017 and then required to pick up two payment in 2018?
Permalink Submitted by Alan - IRA critic on Fri, 2018-06-01 18:06
You should ask to speak to a higher resource at the broker because I think you have been misinformed. You had constructive receipt of the check in 2017 and the 1099R has been appropriately issued. A stop payment and replacement check should not change that, although you have to pay some fees. The replacement check should not require 1099R reporting for 2018. The broker should have accounting codes to use so that the replacement check is not reported, but of course a stop payment must be part of the transaction. However you speak to should check with their tax Dept if they are not sure how to handle this.
Permalink Submitted by Ben Meyer on Sat, 2018-06-02 15:06
Under the UCC, a check does not become stale until six months after the date on the check. But if a shorter time is printed on the check, such as “Must be cashed within 60 days”, then a shorter period may apply. In the absence of such a notice on the check, it looks like a check issued in late December 2017 would still be within time for a few more weeks.