IRA 1099-R and 5498 for deceased parents
My mother and father both died in 2012. Mom died first, and she had not taken out her 2012 RMD. RMD was taken out after her death. Remainder of her IRA was rolled over to Dad’s. 1099-R for her RMD correctly has Dad’s name and SSN. Both the IRA and Total Distribution boxes are checked. Both the Gross Distribution and Taxable Amount boxes contain the RMD amount. Is this correct? Should the remaining amount transferred to Dad’s IRA show up on this or another 1099-R somewhere?
Dad died a few days before the end of the year. His 5498 shows an RMD amount for 2013. I believe the 5498 was in process before I notified the credit union of his death. Is his 5498 correct or do I need to ask for a corrected one?
Permalink Submitted by Alan - IRA critic on Wed, 2013-02-13 04:33
Sorry to hear of your loss. There will not be a 1099R for the rollover of Mom’s IRA if it was done by direct transfer, and if so no reporting of this rollover is needed on their final return. If Dad’s 2012 RMD was not distributed, it must be distributed ASAP to his beneficiary and is taxable to his beneficiary. There should be a 5498 and annual statement issued for Dad and also for each non spouse beneficiary of his. However, the recent 5498 will be correct with respect to the account balance on which 2013 RMDs are based.
Permalink Submitted by Ginny Trautman on Wed, 2013-02-13 15:42
Thank you, Alan. Dad’s 2012 RMD was distributed last May, so we’re all set with that. Yes, the rollover from Mom’s IRA to Dad’s was done by direct transfer at the same credit union, so the 1099-R is correct. When you said beneficiaries will each get a 5498 did you mean for 2012 so each beneficiary will know what the year-end balance was for his/her portion of Dad’s IRA? We are currently in the process of setting up the beneficiary IRAs for each child.
Permalink Submitted by Alan - IRA critic on Wed, 2013-02-13 20:09
Yes, the very limited RMD notification requirements for non spouse inherited IRAs has not changed since 1989 and is outlined in the following link and in the IRS 1099R Instructions. When the custodian records the recent death, they should issue a 5498 showing the 12/31/2012 balance and both decedent’s name and beneficiary name for each separate beneficiary. After that, IRA custodian responsibility for inherited IRA RMD notifications ceases. If the 5498 forms are late, each beneficiary can plan that 2013 RMDs will be based on their % share of the 12/31/2012 IRA balance.http://www.rdapps.webchuckhosting.com/sites/rd.webchuckhosting.com/files/file/RevenueProcedure89-52.pdf