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How do I correct a return where the taxpayer has failed to take a RMD but, has already filed a return for this year?

ggoeller
Level 1

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

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.)

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

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abctax55
Level 15

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.)

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches

View solution in original post

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Marc-TaxMan
Level 8
noticed by his diligent tax preparer who swoops in to the rescue!
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rbynaker
Level 11
I would file the 2018 Form 5329 by itself with the waiver request.  It's a 2018 penalty you're asking to be abated.