bene IRA forgot their 2010 RMD to take out
Hello,
There is a beneficiary IRA account holder that is working on taking out their RMD for 2011. They just found out that they did not take their 2010 RMD. His reason is that he thought he had taken it or that it was waived. How can I help him? what does he need to do ?
Permalink Submitted by Alan Spross on Tue, 2011-12-20 00:27
Take out the 2010 RMD amount. At this late date, they might as well determine if they want the 2010 RMD taxable this year along with the 2011 RMD. If they want it taxable in 2012 along with the 2012 RMD, then they can wait 2 weeks before taking it out.
Once they withdraw the 2010 RMD, they should make a copy of the statement showing the distribution and send in a stand alone 5329 for 2010 requesting waiver of the penalty for “reasonable cause”. See p 6 of the 5329 Instructions. He might use the excuse that he thought the 2009 RMD waiver extended to 2010 if he does not have a better one, eg a health related one. The IRS will probably excuse the penalty.
Note that if he takes out the 2010 RMD before the end of this year, his 2012 RMD will be somewhat lower because the amounts he takes out will not be in the 12/31/2011 balance.
Permalink Submitted by Shahpar Naghshineh on Tue, 2011-12-20 00:30
you guys are awesome every time!!!! Happy holidays!!!!