1099R Code for distribution from an Inherited IRA

[KdGal]

My client received a 1099R for a distribution taken during 2019 from an Inherited IRA account.   My client was the non-spouse beneficiary of this IRA and inherited it several years ago.  The funds are held in an inherited IRA.  My client is over age 59 1/2 (actually 61 yrs old).    The 1099R is coded with a "1" in box 7.   That seems wrong to me.  If she is over 59 1/2, shouldn't it be a code "7" normal distribution so that the 10% early w/d penalty doesn't apply?

Any guidance or advice is much appreciated. 

Thank you.

[Lou S.]

If it's an inherited IRA shouldn't the code be 4 - since this is a death benefit payment?

But yes the code of 1 is clearly incorrect if he is over 59 1/2.

 

[KdGal]

3 hours ago, Lou S. said:

If it's an inherited IRA shouldn't the code be 4 - since this is a death benefit payment?

But yes the code of 1 is clearly incorrect if he is over 59 1/2.

 

Thank you for your reply!   I knew it should be a code 4 in the year she originally rolled over the funds into the inherited IRA.  I wasn't sure if it would continue to be a code 4 if she took distributions from the inherited IRA in future years as well.  Thanks!

 

[Bird]

Agree it should be code 4.  Hard to believe this isn't a problem with the account setup and registration - does it include "BENE" or "BENE PAYOUT" or something similar?  Is the DOB correct in the system (not that it should matter)?