Inherited IRA with missed RMD’s
I have a clietn whose mother died at age 81 in Oct 2009. He transferred money into an inheritied IRA on 12 31 2009, and has taken no RMD’s
can he take his 2010 and 2011 distribution and file to waive the penalty, or is he now going to have to take the money under 5 year rule?
Permalink Submitted by Alan Spross on Thu, 2011-09-22 21:10
The 5 year rule never applies when the IRA owned passed on or after the required beginning date.
The client should take the 2010 RMD ASAP and file a 5329 for 2010 requesting the IRS excuse the penalty for reasonable cause. He can send the statement showing a distribution in the amount of the 2010 RMD with the request and the IRS will likely waive the penalty. He can also say this was his first beneficiary RMD and he did not understand the requirements. The 5329 can be filed by itself if he has already filed for 2010. Then he must take his 2011 RMD before year end.
There are no issues for 2009 because all RMDs were waived for 2009.
Permalink Submitted by Kathleen Fish on Thu, 2011-09-22 21:18
Thakns so much, I forgot about 2009 and the RMD’s not being required.