1041 IRA RMD penalty
I have a trust that was supposed to receive a RMD and did not. Corrective distributions were made in 2009. Do I file form 5329 to calculate the penalty? Or is there a different form for 1041s? Do I pick up the 08 phantom distribution? Does the penalty get paid now on the trust and then ask for abatement with a letter?
Help please!!
Permalink Submitted by Alan Spross on Wed, 2009-03-18 18:18
Form 5329 applies for any IRA beneficiary or owner.
A trustee is also eligible to request the penalty be excused for reasonable cause (RC). See the Form 5329 Inst. p 6, “Waiver of Tax”. The trust does not have to pay the penalty unless the IRS denies the request to excuse it. The delinquent RMD should be withdrawn as soon as the omission is discovered, and evidence of the distribution can be included with the request to excuse to show that the problem has been remedied.
The RMD is taxable in the year it is actually received.