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Level 3
March 20, 2023
Question

Deceased Spouse with 3 year disaster IRA distribution

  • March 20, 2023
  • 3 replies
  • 28 views

I am preparing a tax return for a taxpayer whose spouse died in 2022.  The deceased spouse has a 3 year spread on a disaster IRA distribution, 2021-2023.  How is the third part handled that would normally be filed on the 2023 tax return?

 

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3 replies

Just-Lisa-Now-
Intuit Community Champion
March 20, 2023

The remainder goes on their final return.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Level 3
March 20, 2023

How is the 3rd portion (2023 amount) added into proseries?  The 2022 amount is flowing in penalty free.

Just-Lisa-Now-
Intuit Community Champion
March 20, 2023

it should do it automatically when you enter the date of death...was this a covid distribution? 

Those were taxable in 2020, 2021 and 2022, this would be the last year.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
sjrcpa
Level 15
March 20, 2023

Unresearched opinion - I think it goes in 2023 estate 1041 for decedent.

The more I know the more I don’t know.
qbteachmt
Level 15
March 21, 2023

"If a taxpayer who spread the income from a qualified 2020 disaster distribution over 3 years dies before the last tax year of that 3-year period, the distribution may no longer be spread over 3 years. The remainder of the distribution must be reported on the return of the deceased taxpayer. Include the remainder in the line 13 and/or line 24 totals, as applicable, of your 2021 Form 8915-F.."

https://www.irs.gov/instructions/i8915f

 

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Just-Lisa-Now-
Intuit Community Champion
March 21, 2023

thats what I was thinking of, but is that for ANY disaster distribution or only for the 2020 Covid one?  the OP says this was a 2021 disaster distribution.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
qbteachmt
Level 15
March 21, 2023

"is that for ANY disaster distribution or only for the 2020 Covid one?"

I agree, and the first thing I looked for is how it is worded. The IRS has very clearly differentiated "coronavirus" or covid disaster, from qualified disaster, as seen in the 8915-F instructions.

https://www.irs.gov/instructions/i8915f

"A coronavirus-related distribution can't be made after 2020. Also, a distribution is not a qualified 2020 disaster distribution or a qualified 2021 disaster distribution if it is listed in Distributions that are not qualified disaster distributions, later. See Limit, later, for the dollar limit on qualified disaster distributions."

https://www.irs.gov/forms-pubs/about-form-8915-f-qualified-disaster-retirement-plan-distributions-and-repayments

IRS has instruction changes:

"If you downloaded the Instructions for Form 8915-F (Rev. January 2022), please be advised that those instructions have been replaced by the Instructions for Form 8915-F (Rev. February 2022) to correct the disasters listed in Appendix B under the Table for Qualified 2020 Disaster Areas. The revised instructions also address the lines on which to enter income on Form 8915-F for a decedent who has spread the income from their distribution(s) over 3 years and who dies before the 3-year period has ended."

"Reporting the remaining distribution amount when the taxpayer has died

On page 2, in the Caution under How Is a Qualified Disaster Distribution Taxed, we added this sentence: “Include the remainder in the line 13 and/or line 24 totals, as applicable, of your 2021 Form 8915-F.”

Please download the  https://www.irs.gov/pub/irs-prior/i8915f--2022.pdf for the revised text."

And: https://www.irs.gov/forms-pubs/update-to-form-8915-f-and-its-instructions-to-explain-the-treatment-of-carrybacks-and-certain-distributions

 

The last comment I want to make, that was nagging at me yesterday, was the 2021 tax year prep seemed to indicate there were no 2021 qualified disasters per the IRS process. I see nothing like this in the table of disasters. I wasn't going to fact-check the OP, though.

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