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Required Minimum Distribution (RMD)

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Level 2

My client missed taking an RMD for 2019. I informed her to take the 2019 RMD ASAP. We are preparing Form 5329 and attaching a statement requesting a waiver for the 50% penalty for not taking the RMD timely. this will be attached to the 2019 Form 1040 tax return. Both husband and wife are elderly and he has serious medical issues so the RMD was forgotten.

First, do you agree that this is a good reason for the penalty waiver?

Second, they will take the 2019 RMD now in 2020. Is this 2019 RMD to be reported along with their 2020 RMD when preparing the 2020 tax return? There is no 1099R reporting the RMD for 2019.

 

Thanks.

 

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3 Replies 3
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Level 15
Level 15

Yes, that reason should suffice, they should also look into making the RMDs come out automatically, so they cant forget again in the future.  I've never see a penalty actually assessed on a late RMD.

2020 will end up with 2 RMD withdrawals, since the one in 2019 was missed, be sure to take the double income into consideration when planning for 2020..


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 3

Absolutely agree with Lisa, in fact had the same issue.  Reported the missed RMD in following year, filed 5329 in year missed, and recommended T/P have their future RMD's setup to be taken out monthly.  Never rec'd a penalty.

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Level 2

The 1099R for 2020 will have total amount for both withdrawals (late 2019 and normal 2020). when you submit 5329 tell them what was done. Worked well for me...Dan