Missed RMD

[imjulier]

Taxpayer forgot to take RMD but it is corrected now because funds were issued in 2014. I know form 5329 can be used to request relief of penalty. Instructions for form say to pay the tax and ask submit explanation for abatement. ATX removes the tax when working in the 5329. Should I just over-ride? Also, how do I submit explanation for electronically filed return?

Thanks,

Julie

[kcjenkins]

I would file the 5329 separately, on paper. And include the documentation to support the request for abatement on paper too. It's not going to be decided during processing the 1040.

[jasdlm]

Last year I had one, and I did efile the 5329 with the return. Hope it doesn't come back to haunt me. I haven't heard anything yet. I put the RMD on line 50, the amount distributed on line 51, bunny hop on Line 52 and request the amount of shortfall that the waiver is requested on. Write the explanation in the space provided. The penalty disappeared and efile went through with no problem. Filed the return this year with the amount in income (because it was taken in 2014) and no trouble yet there, either.

Knock on wood.

[kcjenkins]

That's hopeful.

[jasdlm]

Hope is what I've got right now .

[Abby Normal]

Last year I had one, and I did efile the 5329 with the return. Hope it doesn't come back to haunt me. I haven't heard anything yet. I put the RMD on line 50, the amount distributed on line 51, bunny hop on Line 52 and request the amount of shortfall that the waiver is requested on. Write the explanation in the space provided. The penalty disappeared and efile went through with no problem. Filed the return this year with the amount in income (because it was taken in 2014) and no trouble yet there, either.

Knock on wood.

I didn't think you were supposed to report the income until the year you actually received it.

Here are the relevant 5329 instructions:

1. Complete lines 50 and 51 as instructed.

2. Enter “RC” and the amount you

want waived in parentheses on the

dotted line next to line 52. Subtract this

amount from the total shortfall you

figured without regard to the waiver, and

enter the result on line 52.

3. Complete line 53 as instructed.

You must pay any tax due that is

reported on line 53.

Line 53 is just the 50% tax, not the income tax on the missed RMD.

What does 'RC' stand for?

[jasdlm]

Line 50 of the 2013 form says minimum required distribution for 2013 and Line 51 says Amount actually distributed in 2013 which is why I reported it in the year it should have been taken - the form and instructions seem to read that way to me.I have to hope for the best, because I already did it.

[Yardley CPA]

I believe you are required to report the missed distribution on the tax return. I have a client who had a missed RMD during 2013. In reviewing her information she provided me this year, there was a 2012 Form 5498 from Ameritrade. Line 11 was checked (If checked, required minimum distribution for 2013) and it provided the amount of the RMD. I had my client call to confirm that an RMD was to be made and Ameritrade confirmed it should have been. Client has taken the steps to have the distribution made.

In reading through the instructions for form 5329, I interpreted them the same as "jasdlm." I believe the 5329 should be included on the 2013 1040 (at least I hope it should.)

The instructions also provide information on how to request a waiver of the tax and what needs to be done in order to do that. I've attached the link for the 5329 instructions. See page 7, middle column bottom.

http://www.irs.gov/pub/irs-pdf/i5329.pdf

[Margaret CPA in OH]

Client last year missed one as she changed custodians. They messed up. She is 83 and had never missed one until this change in custodians. Her mistake was that she would take it in December so she didn't really notice with year end stuff. She now has it to be distributed in September. IRS waived penalty.