Deceased IRA owner
IRA owner taking RMD’s died in 2013 before taking his RMD for that year. His daughter
is the designated beneficiary and did not take her fathers 2013 RMD. Can she take
this by December 31 following the year of death which would be Dec. 31,2014?11
Permalink Submitted by Alan - IRA critic on Wed, 2014-06-18 20:45
She should take out the year of death RMD as soon as she discovers it had not been completed. She should also file a 5329 on her 2013 return (1040X with 5329 if 2013 has been filed) to request the penalty waiver for “reasonable cause” and provide the best explanation possible and attach a copy of the distribution statement showing an amount equal to the RMD shortfall). It is entirely normal for this not to be discovered until the following year and the IRS almost always waives the penalty. The longer the delay, the better the reasonable cause has to be to get the waiver. In summary, determine the amount of the shortfall, have it distributed in a separate distribution, and then file the 5329 requesting penalty waiver. She will be taxed on both her own 2014 RMD and the make up RMD for the year of death in 2014.