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]

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?

[abctax55 · Accepted solution]

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.)

[Marc-TaxMan]

noticed by his diligent tax preparer who swoops in to the rescue!

[rbynaker]

I would file the 2018 Form 5329 by itself with the waiver request.  It's a 2018 penalty you're asking to be abated.