If 5498 is for IRA Contributions, how is it ued for Distributions/RMDs taken from Inherited/Beneficiary IRAs?

Submitted by Cheryl Van Beek on Tue, 2016-12-20 15:15

Is a 5498 always used for Inherited/Beneficiary Traditional IRA Accounts? If 5498 is for IRA Contributions, how is it used for Distributions/RMDs taken from Inherited/Beneficiary IRAs? Should someone who inherited a Traditional NON Spouse IRA, and therefore is unable to make any contribuions to that IRA, still have a 5498 completed by the Custodian for that inherited IRA Account? If so, I presume, 5498 should still have IRA checked in Box 7 and show RMD amounts and Fair Market Value? Also, should the full account title as in “Jane Doe (beneficiary) John Jones (Deceased).” be listed in Participant’s Name section? Anything else?



Submitted by David Mertz on Tue, 2016-12-20 17:18

  • As with any IRA with no contributions made for the year, I would expect the custodian to file Form 5498 with the IRS, reporting in box 7 the year-end FMV.  With no contributions for the year, the custodian is not required to mail a copy of the Form 5498 to the participant if the year-end FMV is explicitly provided to the participant in a separate statement, such as an account year-end statement or a January statement.  The Form 5498 filed with the IRS should be present in the participant’s Wage & Income transcript from the IRS after the Form 5498 filing deadline.
  • The instructions for Form 5498 state, “An IRA holder must be able to identify the source of each IRA he or she holds for purposes of figuring the taxation of a distribution from an IRA. Thus, the decedent’s name must be shown on the beneficiary’s Form 5498 and annual statement.”  I would therefore expect the Participant box of the Form 5498 and the annual account statement to show the full account title similar to what you described.

Submitted by Cheryl Van Beek on Tue, 2016-12-20 18:11

Thank you.

Submitted by Jose Morales on Tue, 2016-12-20 23:11

To address one point in the original post, although a beneficiary will receive a 5498 (unless the FMV is otherwise provided on a year end statement) the RMD will not be listed.  RMDs are provided only for the original account owner as there is no easy way for an IRA Custodian to easily determine a beneficiary’s mandatory distribution amount in many circumstances.

Add new comment

Log in or register to post comments