5329 2015/2016 Confusion
From previous posts, my understanding was that if an Inherited IRA RMD is missed in 2015 (decedent’s year of death) and taken by Bene in 2016, the Bene should report the distribution on Bene’s 2016 return and Bene’s 2016 8606, file a 2015 5329 for themselves, try sending it as a stand alone (hoping no amendment is required since it doesn’t alter any figures on Bene’s 2015 return) and mails it by itself. Is this definitely correct?
DMx’s answer to my post, “5329 Question” seems to indicate that I cannot file it separately and must file it with my 2016 return, but I don’t understand that because the missed RMD was for 2015 taken in 2016. Please help, thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2017-04-05 23:56
There are two options. Send the 2015 5329 in by itself and the IRS will usually accept it. However, some examiners may ask for a 1040 X. The instructions for Form 5329 under “Prior tax years” is very poorly worded by providing an example when it should be filed by itself and another example where a 1040X is required. But neither example addresses the situation where no other changes to the return exist, but a return has been filed. And that is the usual situation when an RMD is missed. You could go either way, but filing the 1040X is the best option if you want to be more sure that the IRS will not contact you again. And they most often do not contact you to confirm that the penalty waiver was accepted. No news is good news, but it means you will have to wait to be sure.
Permalink Submitted by Cheryl Van Beek on Thu, 2017-04-06 00:42
Okay. Thank you again.