Grace period to make up shortfall of RMD in inherited IRA, and form to use to report
Is there a grace period to make up a shortfall of RMD in inherited IRA? If so,what form to use to report it? Thanks!
Is there a grace period to make up a shortfall of RMD in inherited IRA? If so,what form to use to report it? Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2018-09-20 15:05
There is no time limit or grace period. RMDs taken late when self reported on Form 5329 will usually result in the IRS waiving the 50% penalty. The 5329 must be filed separately for each year that the RMD was not completed on time, and while there are only 4 lines that apply in the form, the entry for each line is not intuitive and the 5329 instructions should be read and followed when completing the form. If penalty waiver is required, the RMD shortfall should be made up before filing the form. All distributions are taxable in the year actually received, so older 1040 forms need not be amended.