Jump to content
ATX Community

one for me, RMDs


Lloyd Hudson

Recommended Posts

Title misleading, what is new for me is a gentleman (Longtime client) retired several years ago. Turned 70 in 2013/ We reminded him of RMD obligations . He had multiple tax deferred accounts and dutifully arranged for automatic distributions from his SEP. He discovered recently that he overlooked an IRA that had been sitting out there vegetating. Panics over penalties. I have done several where we ask for forgiveness on first year. But I have no idea of how to report 7 years of missed RMDs  . Do I just lump them on 5329 ? I really do not want to do that. I really do not want to amend any returns. Just looking for the easy and cheap way out of this mess. Assume with all the experience on this forum somebody might have already pursued this. 

Also, T. Rowe Price refused to do the calculations for the client. Would not have helped but I would have thought that in 7 years they would have noticed.

 

Link to comment
Share on other sites

You don't have to amend.  Report on year 2020.  Have him take out the RMD NOW for all missed years .  Good thing he doesn't have to take any 2020 out so income won't be as high.  Have T. Rowe Price resend him the 5498 for each missed year and it will tell what it should have been taken.  Also all they have to do is notify the client of the RMD amount.  they don't know if he took all of it out from one IRA.  I have never had a problem with the penalty.  just do the 5329 page 2 and give the reason and tell them that you have now signed up for automatic withdrawals so it won't happen again.

  • Like 2
Link to comment
Share on other sites

I had a client who missed 14 years of RMDs from a 403b.  I  used the 5329 and said she didn't understand and now automated the payouts.  I have never had them refuse to abate the 50% penalty.  They know they already have a bad image and don't want to be featured on the nightly news taking money from poor old people.

  • Like 1
Link to comment
Share on other sites

T Rowe Price doesn't have to think anything is weird about someone not taking a distribution since it is an accumulated figure and they could have been taking their distribution from another IRA at a different firm. You aren't required to take the RMD from each account. Their only requirement is giving you that RMD number each January. IMO you need to figure out the RMD from EACH account and compare it to what they took out. I have clients who might have an RMD of $21,230 per year and they'll take out $23,000 just to be sure. If that forgotten IRA was small enough, they might not have any problems at all.

  • Like 2
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...