ggoeller
Level 1
12-07-2019
03:54 AM
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Taxpayer filled out form with financial institution in 2017 for RMD but mistakenly applied for a "one time" withdraw. After return was filed for 2018, he discovered his mistake.
How can this be corrected to hopefully avoid the 50% penalty?
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abctax55
Level 15
12-07-2019
03:54 AM
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You report the distribution when received (2019). You don't "fix" 2018 because the distribution was NOT received then.
With 2019, you complete the F 5329 with the appropriate mea culpa. The IRS is usually very forgiving about the penalty, especially when there's proof the error has been corrected (i.e. - the delinquent distribution was taken as soon as the error was noticed.)
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Marc-TaxMan
Level 8
12-07-2019
03:54 AM
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noticed by his diligent tax preparer who swoops in to the rescue!
rbynaker
Level 13
12-07-2019
03:54 AM
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I would file the 2018 Form 5329 by itself with the waiver request. It's a 2018 penalty you're asking to be abated.
