- You should only need 2 distribution forms, one for each account. Not sure where the 7 comes from. You do not need one for each year, just one for each account.
- Check a) Death for the reason. It is the only one that applies.
- One distribution from each IRA account. Total up the amounts you need to withdraw and just request the total. Do your own breakdown on the 5329 forms for the IRS. The custodian does not care about the annual breakdown per year.
- Yes, each is a one time distribution, not a periodic distribution.
- If you will be underwithheld for your total taxable income including the RMDs, then withhold the amount you want. Could be 0 or could be more than 10%. I do not know how much you have paid in for the year up to now. This does not affect any prior years, just 2017.
- You are the beneficial owner of the account now. If they do not have a box for beneficiary, and just ask about owner, put your mother and then “deceased owner”. Yes, some of these forms are not well designed to reflect current situations.
Would it be best if I have them take out 7 separate distributions, one for each RMD for each year?That was why I was going to do 7 separate distributions. I want to make sure that the distributions cannot be seen as a lump sum for 2017, but as corrected distributions in the correct amount. Is this a good way to go?Also, I do need to fill out a a separate form 5329 per tax year, so I will fill out 7 separate form 5329s (2010-2017), or 2010-2016? Will the form 5329 for prior years 2010-2016 affect my prior filed taxes if I fill out the forms with witholding amounts for the corrected rmds I took out this year?
If I elect to have 10% withheld, will it confuse the total rmd amount and the IRS? That is why I was thinking that it might be best to not withhold taxes, to keep it obvious as to what was taken out and make it easier to fill out the form 5329.I am in the lowest 10-15% tax brackets at the moment. Would I still receive a refund of the 10% withheld at tax time if I do withhold taxes from the rmd, even if I am late on 6 years of distributions?Would withholding tax from it actually look more favorable to the IRS?
I was wondering, should I get the original adoption agreement for each of my 2 inherited IRAs, one adoptin agreement for my account and one for when my mother had it? I was told that having the original adoption agreement of the account is useful for knowing how the account is set up and how it affects rmds. Both of my inherited IRAs have not given me the agreement or I can’t find it. Is it necessary that I even have it, if I’m already in the process of taking out my RMDs?
The withholding is immaterial to your 5329 waiver. Both your IRA statements and the 1099R will show the gross amount distributed and the withheld amount, and the IRS should certainly understand the breakdown. The 5329 will only report the gross amounts. This will not confuse the IRS, but if you think that it will cause you to fill out the 5329 forms wrong, then do not withhold. Withholding is also not a factor in whether the IRS will grant the waiver. They almost always grant the waiver when you self report the omission, so I would not worry about extraneous issues such as withholding or adoption agreements. All IRA contracts include the IRS RMD rules, reference to the IRS RMD Regs, and use the default life expectancy rules for RMD. All the IRS cares about here is the amount of the actual distribution (1099R and line 15a of tax return) and the 5329 forms filled out correctly.
Permalink Submitted by tomd37 on Mon, 2017-11-20 22:54
Wasn’t this same question recently asked and answered on another financial forum such as fairmark.com or irahelp.com? If so, I thlnk the correct replies were made. Tom D.