Level 3

IRA RMD not made in year of death administrative waiver?

Forum|Forum|3 years ago
December 19, 2022
2 replies
9 views

Issue: Deceased person usually takes Trad IRA RMD in October. IRA Owner dies before instructing bank to issue RMD. Multiple beneficiaries attempt to submit paperwork to three separate IRA custodians to issue RMD before the end of year, but are unable to complete paperwork in time. 1) There is no exception on Form 5329. 2) There is no regulation (I can find) that covers this circumstance though this can't be the first time this has happened. Q: Is there an administrative procedure that allows for a waiver of the 50% penalty when this happens? I assume the penalty must be paid before the waiver is requested.

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qbteachmt

Level 15

Dates matter. Date of death?

See this article:

https://smartasset.com/retirement/penalties-waived-on-some-missed-rmds

And read on the SECURE Act provisions.

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P

PenumbrookAuthor

Level 3

Date of death is in 2022. We are working on a current year-end deadline and the client's IRA custodians are anticipating delays in the process.

qbteachmt

Level 15

"are anticipating delays in the process"

Taking the RMD is about a 15 minute process. The Executor (not the beneficiaries) would do this, as it is under the dead person's SSN. There are two weeks to do this one task.

"There is no exception on Form 5329"

You include an explanation for waiving the penalty, but they should not need to bother. The RMD is a snap. It might be allocations or distributions that take a while, when there are multiple beneficiaries and if that includes a spouse, etc. That complexity can delay things. Even then, two weeks?

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E

elsaf50

Level 2

Hi there, I think I have a slightly similar situation...

Parent passed away Jan 2024, not having taken RMD's for 2023 or 2024. I understand that the RMD for 2024 should be taken by me, the non-eligible designated beneficiary (non-minor child of deceased).

My question pertains to the missed RMD for 2023, what should be done in that case? Should Form 5329 be filled out on behalf of the deceased or should I fill out the 5329 and ask for a reasonable cause waiver of the penalty (and take the missed 2023 RMD myself)?

Thanks in advance for your time and assistance.

qbteachmt

Level 15

@elsaf50

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Income Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte Tax Preparation programs, and you may be looking for support as an individual taxpayer using TurboTax. Please visit the TurboTax Help site for support.

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Thanks.

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sjrcpa

Level 15

Elsa is driving around in circles. She's been through here at least 3 times.

The more I know the more I don’t know.

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