5498 “Contributions” on Inherited IRA
If one inherits a Non Spouse Traditional IRA, on the 5498 should Boxes 1, 2, 3, 4& 8, 9,10 and all Boxes regarding “Contributions” be $0 since the beneficiary inheriting the IRA did not contribute to this IRA himself? The reason I ask is the “IRA Statement of Condition” that the bank sends to the new account holder/beneficiary lists the entire amount that the beneficiary inherited (total account balance) as “Contributions Direct Transfer” and that same amount in “Current Year Contributions.” I think they are just showing that this is the amount direct transferred to the beneficiary IRA account. This is just a customer statement. I haven’t seen the 5498 yet, but want to clarify and or nip it in the bud if this sounds wrong. Also, on 1099-R, I believe Box 5 and any others regarding “Contributions” in this case should be $0, is that right? Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2017-01-20 22:59
Yes, any boxes related to contributions should be blank. An exception would apply if the account was not inherited the entire year, and contributions were made to that same account number before the owner’s death. The custodian may even know about the owner’s death but if the beneficiary has not created a separate account, a given TIRA account or Roth account might have been owned for a portion of the year. For a typical non spouse inherited IRA the 5498 would be limited to year end account values and other RMD related boxes.
Permalink Submitted by Cheryl Van Beek on Fri, 2017-01-27 23:02
Thank you for your help.