Beneficiary IRA Distribution

[Guest talktomatthew]

I am named as a Beneficiary on my father's IRA. He passed away in 1995 and I have only recently been informed that I was supposed to elect a distribution method within two years of his death, and begun taking disbursements. Is there any way I can avoid taking a large disbursement and paying late penalities?

[BPickerCPA]

Depending on your father's age when he died, and possibly on elections he made while still alive, you should have taken some, or possibly all of the account out by this time. The penalty for not doing so is 50% of the account balance. The procedure for getting the penalty waived is to pay the penalty (and interest running from the year that you should have paid the penalty) and then request a waiver of the penalty, for cause.

I strongly suggest contacting a knowledgeable professional in this area, to work it out. The sooner the better.

Also, you needed to make any applicable election in the year following his death, meaning 1996, not two years.

Barry