Do I report 2024 Inherited IRA Missed RMD information on lines 52 & 53?

[Love2Cruise]

Client's financial institution did not disburse the 2024 RMD for an inherited IRA that they weren't aware of until I asked the client why she had a disbursement for 2025 and not 2024? They disbursed the funds today which will be reported on the 2026 1099. I'm filing the 5329 for 2024 but am confused as to where to enter the information. Is it only in Part IX, line 52 and 53? And do I file the form alone or as an amended return?

[rbynaker]

Taking a step back, did the inherited IRA qualify for the RMD waiver?

Scroll down about 60% for the Limited Relief section of the article, including an example:

https://www.kiplinger.com/taxes/irs-10-year-rule-for-inherited-iras-kiplinger-tax-letter

Rick

[Love2Cruise]

I spoke with the financial client services manager of the client's financial institution, and she confirmed that the 10-yr rule does not apply. 

[BobKamman]

The only thing more dangerous that calling the IRS for help with a tax question, is calling a financial client services manager.  

[Love2Cruise]

LOL! She called me to inquire as to whether they should withhold taxes for the missed distribution. 😳 

Now THAT is dangerous. You can't make this stuff up. 

[Love2Cruise]

Just following up to see if anyone can assist me with this question. 

Thank you in advance. 

[IntuitReneV4 · Accepted solution]

Yes, you will enter the information in Part IX, Additional Tax on Excess Accumulation in Qualified Retirement Plans, line 52a and line 53b. 

For your 2024 Form 5329 entries:

Click on Where do I Enter? at the top left corner of your ProSeries screen and type 5329

1. Select Form 5329-T
2. On Form 5329-T, scroll down to Line 52a and input the $_ that was their RMD
3. On Line 53a, input zero (0) for the amount of the RMD they took
4. Input the $_ in Box A found just below Line 53b
5. Click Explain just below the $_
6. Write: "Taxpayer mistakenly did not take the RMD for their inherited IRA. Upon discovering the error in 2026, they immediately withdrew the full 2024 RMD amount of $_. They have now set up an automatic withdrawal to ensure this does not happen again."

Note: Since they missed their RMD in 2025 as well, you will need to complete the above steps again while completing their 2025 tax return, including the explanation.

An amendment is generally not required to file Form 5329, since it is a stand alone form. However it is recommended to ensure that the IRS computer links the waiver to the correct tax year.

[BobKamman]

@IntuitReneV4  writes, "Note: Since they missed their RMD in 2025 as well, you will need to complete the above steps again while completing their 2025 tax return, including the explanation."

Where is that coming from?  The original post states, " I asked the client why she had a disbursement for 2025 and not 2024?"

We'll never know, apparently, whether this was an inherited IRA from years ago, with distributions required every year under single life expectancy; or from someone just recently deceased, in which case it's almost certain that an IRS waiver applies.  

[Love2Cruise]

@BobKamman you caught that. 

It is an inherited IRA from deceased mother in 2017 and is not subject to the 10-year rule.

I am happy that I can file an amended return to submit the form as opposed to mailing it. Lord only knows how long it would take to process and post to her account.

[BobKamman]

A mailed 1040-X will take about a week longer to post to her account than an e-filed one, but why are you worried about it if there is no tax being paid with it?

And yes, what IRS wants is a Form 1040-X for 2024 with the 2024 version of Form 5329 attached:

Prior tax years. If you are filing Form 5329 for a prior year, you
must use the prior year's version of the form. If you don’t have
any other changes and haven’t previously filed a federal income
tax return for the prior year, file the prior year's version of Form
5329 by itself (discussed earlier). If you have other changes, file
Form 5329 for the prior year with Form 1040-X, Amended U.S.
Individual Income Tax Return.

[Love2Cruise]

Very true! It's the bookkeeper side of me that wants to make sure her account is updated in a timely manner. A byproduct of the trade, I guess. And e-filing is much more efficient. 

Thank you for providing the instructions again. Last night I read that multiple times, and multiple times I understood it as "you can't e-file the form". That's what happens when it's late and you need to call it a night. Now I read it and understand it as it is written. 

Many thanks @BobKamman! 🙏

[Love2Cruise]

Does the state (DC) need to be amended as well? I would think not since it doesn't affect the taxable income.