5498 Clarification

Submitted by Cheryl Van Beek on Wed, 2017-05-31 18:47

This is a follow up to alaniracritic’s response to my earlier question “How to Correct these 5498 Errors” on a Non spousal inherited IRA In this case, the 5498 in the name of the Deceased only is showing an amount in Box 1 as a Contribution and by IRS law neither the owner/decedent nor the beneficiary would have been able to contribute to this IRA even if the decedent had been alive in 2016 (which she was not). It also incorrectly shows that there will be a 2017 RMD for this account due. Again, this account was closed and retitled with a new account number etc. November 2016. I’m concerned this will cause problems with IRS. Wouldn’t a correction be warranted in this case? Thank you.



Submitted by Alan - IRA critic on Wed, 2017-05-31 19:22

It is rare that a contribution would be reported that was never made. Even a disallowed contribution should be reported if made, but if no contribution was made then the 5498 should be corrected to remove the Box 1 figure. If the 5498 needs to be corrected for an incorrect contribution, then the custodian should correct the RMD information as well.  Are you sure this is a 2016 5498, just received?

Submitted by Cheryl Van Beek on Wed, 2017-05-31 19:42

Follow up to alaniracritic’s response to my earlier question “5498 Clarification/How to Correct these 5498 Errors. Yes, this is regarding a just received 5498 for 2016. In this scenario, a check was sent to the decedent in 2016 for what the Custodian thought the owner should have received as their 2016 RMD before the Custodian was informed the owner had passed away. When the Beneficiary informed the Custodian, at the Custodian’s request, the check was returned and put back into the account since it should not have been issued in the first place. But no contribution was made to this account for 2016 and it is a closed account so no RMD is required for 2017. Thanks.

Add new comment

Log in or register to post comments