RMD. When is it taxable?

[dbtaxsolutions]

Client is concerned about hefty penalty.  The RMD check (beneficiary) check was not processed in 2018 (but was Submitted in 2018).

In short the RMD check was released in 2019 (death benefit) it was submitted to the broker for processing in end of 2018, but check was paid out in 2019.

I kept telling the client that this will be included in 2019 tax return, am i correct? Client is terrified of penalty if it's not included in 2018 tax return. Any thoughts? Thank you

[IRonMaN · Accepted solution]

You are correct.  If it was supposed to be distributed in 2018, use the 5329 to request waiving any penalty.

[dbtaxsolutions]

 How likely is it that the waiver will take effect. 50% is a big penalty. I have never used this form. Do i just put the amount distributed on Column A, row D (Death, it was a death benefit)? thanks IronMaN

[Just-Lisa-Now-]

the waiver is at the very bottom of the form...Lines 52, 53 and the smart worksheet A below Line 53

[IRonMaN]

"How likely is it that the waiver will take effect. 50%"
Very likely

[Just-Lisa-Now-]

you don't enter the income for 2018, it will get included for 2019 when you get the 1099R for the distribution....2019 will end up with 2 distrubtions

[dbtaxsolutions]

Super awesome yous! Thank you

[IRonMaN]

You  betcha!