Missed RMD’s for two years
A new client came in for consultation and it was discovered that he hadn’t taken his RMD’s from one of his IRA’s for 2010 and 2011. I suggested he remedy the situation by taking the distributions out now in January and file form 5329 for each year with a letter explaining that it was an honest mistake and a request for the 50% penalty abatement. I was going to have him file the 2010 form 5329 immediately and perhaps wait to file the 2011 form 5329 when he files his 2011 Federal Tax Return. Any thoughts or comments on this strategy ? Thanks !
Permalink Submitted by Alan Spross on Mon, 2012-01-23 20:12
That should work fine. It will help to include a copy of the distribution statement showing the correct amount of the 2010 RMD. If both year’s RMDs are distributed together, then show a breakdown of the 2010 amount and the 2011 amount.
First, if he has several IRAs, you might have him double check to see if more than the RMD was taken from any of the other IRAs since the RMDs can be aggregated over all the accounts.
Permalink Submitted by Paul Edmunds on Mon, 2012-01-23 20:23
Thanks Alan ! Yes, I did check to determine if he took his total RMD annual requirement from one of the other IRA accounts and he did not. ALSO – I do intend to have the client take separate distributions for each year and include proof of that with correspondence to the IRS.