Missed RMD for inherited IRA
Taxpayer has had an inherited IRA for some time and has made the required RMD’s year after year until 2017. Taxpayer claims broker never told her to take the RMD. My understanding is the IRS gives a little more leeway on the missed RMD penalty, but how should the taxpayer go about it? Taxpayer is getting up in years and memory is becoming an issue. Is “broker never told me” a reasonable cause? Is this addressed on Form 5329? I would think take the 2017 RMD ASAP as a 2018 taxable event and don’t for get the 2018 RMD, as there will be two RMD’s to report in 2018. As an aside, are brokers required to notify beneficiaries of upcoming RMD requirements?
Thanks for any help.
Mark
Permalink Submitted by Alan - IRA critic on Mon, 2018-07-23 16:42
You are correct. Taxpayer should make up the late RMD ASAP, then file Form 5329 requesting the penalty waiver for reasonable cause. The IRS has been accepting reasons similar to this one, or simply “I forgot to take my RMD”. The 5329 can be filed stand alone if 2017 as already been filed, otherwise it can be added to the extended 2017 return. The IRS custodian is only required to report the year end value of the inherited IRA on Form 5498 or year end statement. The amount of the beneficiary RMD is not required to be reported.