Reporting for IRA of Deceased Individual
I am trying to determine how to report a 5498 for a deceased client. The client passed away in 2020 and an RMD was paid out prior to that (which is irrelevant since it could have been waived). Their has been ongoing disagreement between beneficiaries(non-spouse), and the IRA has yet to be distributed. My question is, on the 5498, do I file the form with an RMD amount since the client will not be taking one, nor is there an RMD amount required due to the SECURE Act changes and new ten-year rule. Or do I just report the Fair Market Value, and not check the box indicating that an RMD is due? Any guidance is much appreciated!
Permalink Submitted by Alan - IRA critic on Fri, 2021-01-29 22:51
With respect to the RMD amount only, no RMD info is entered for deceased participants, nor for beneficiaries other than spouses who have elected ownership. For years the 5498 Inst have indicated this to be the case until further guidance is published, and for year the IRS has not published further guidance on this issue. Not sure whether passage of Secure will finally result in guidance, but I wouldn’t bet on it. In short RMD info must be provided for participants, but not for beneficiaries. See p 18 of the 5498 Inst.
2021 Instructions for Forms 1099-R and 5498 (irs.gov)