Missed RMD’s on Beneficiary IRA
Hi there,
A new client just onboarded with me and upon review of their accounts, I noticed they have an Inherited IRA from 2016 that has missed RMD’s. The decedent was post RBD and passed in 2016. The beneficiary was his daughter. She inherited the account in 2016, but did not take distributions until 2023. She took distributions in 2023 and 2024.
Any advice on how to proceed would be much appreciated.
Thank you in advance.
Permalink Submitted by Alan - IRA critic on Mon, 2025-01-06 17:37
To make up the missed RMDs, she would have to determine what they would have been, add them up, then take a total distribution and file a 5329 for each missed year requesting that the penalty be waived for reasonable cause. The IRS has been waiving these penalties in recent years.
All RMDs were waived for 2020, so that year can be ignored. The old RMD tables applied prior to 2022 and divisors for 2022 and later RMDs should be reset to reflect the 2022 tables. The distributions taken in 2023 and 2024 may have been more than the RMDs for those years, and any excess could be applied to the missed RMDs.