Failure to take RMD in 2012 took in 2013
Taxpayer failed to take 2012 RMD but took it immediately in 2013 upon discovery. Waiver for additional 50% tax will be requested. What year does he show the actual distribution on his tax return? The 1099R for the 2012 RMD will be issued in 2013 as will the 2013 RMD. It seems hwe will double up in 2013.
Permalink Submitted by Alan - IRA critic on Tue, 2013-03-19 23:12
Correct. The late RMD as well as any other distributions are always taxable in the year distributed. The 2012 return will not include an RMD, but will include Form 5329 with waiver of penalty request. The 2013 return will include both RMDs and in addition, the 2013 RMD will be determined using the actual 12/31/2012 balance, not the balance adjusted for the RMD that was missed in 2012.
Permalink Submitted by tomd37 on Tue, 2013-03-19 23:13
I too am very interested in the answer to this question, but cannot find a way to “follow” any response, therefore I am replying and therefore should see later responses.The recent upgrade to this forum site leaves much to be desired in my opinion. IMO whoever remodeled this site has not done a decent job and leaves much to be desired. I hope the site admin is reading this.
Permalink Submitted by tomd37 on Tue, 2013-03-19 23:19
Alan,We have a taxpayer who did exactly the same; failed to take 2012 RMD and discovered same just after their 2013 RMD distribution. Told them to request their 2012 RMD as soon as possible and request a waiver referencing their recent 2012 distribution documentation. My question is, since their 2012 return had already been submitted, what is the mechanics of submitting their 5329? Is it a stand-alone document now with attached documentation reflecting both their 2013 RMD and their after-the-fact 2012 RMD? Thanks.Tom D.
Permalink Submitted by Alan - IRA critic on Tue, 2013-03-19 23:50
Tom, unfortunately the IRS insists that this 5329 be added to a 1040X for a year where the return has already been filed. There is no good reason why they need a 1040X in this situation, but there has been several reports that taxpayers filing a stand alone 5329 for a prior year received letters requiring the 1040X. The “reasonable cause” explanation and a copy of the distribution statement equaling the 2012 RMD can be attached.
Permalink Submitted by tomd37 on Wed, 2013-03-20 00:47
Thanks for the prompt reply. Will be meeting with the AARP Tax-Aide team tomorrow that did the taxpayers 2012 return and will share your thoughts. Hopefully the taxpayers will have aleady requested and received their 2012 RMD and we can use that documentation to support the waiver of penalty request on the 5329 which will accompany the 1040X.Tom D.
Permalink Submitted by mk foss on Wed, 2013-03-20 00:59
There is no need to prepare Fom 1040-X when you’re requesting a waiver after the return for the missed year has been filed. You just complete the Form 5329, attach the reasonable cause explanation and explain that the missed amount has been taken before the current form is filed.Most IRS Campuses have one person who handles those requests. If you can get the address, you can send it directly there.In every case where I’ve prepared one of these, the waiver has been granted and no Form 1040X has been requested.
Permalink Submitted by tomd37 on Wed, 2013-03-20 01:53
Thanks a lot Mary Kay. Do you know where the campus would be for people here in Tennessee? 1040-X goes to Kansas City, MO. This too?
Permalink Submitted by mk foss on Wed, 2013-03-20 01:59
Sorry I do not. I have the address for Fresno though.