Late RMD Taxability form 5329

[Guest Quicksilver]

General question - In what year are the late required minimum distributions reported as income ? current taxable year or does a participant have to go back and file amended returns for the years it should have been distributed? Instructions on the 5329 are not helpful at all. Have you run into this and for what years do you issue the 1099R forms?

[masteff]

It's in the instructions but easy to not catch... "The tax is due for the tax year that includes the last day by which the minimum required distribution is required to be taken."

What this means is: if the MRD was due by 12/31/2008, then the tax is due for the 2008 tax year. So, the 2008 tax return would need to be amended.

As to the 1099-Rs... the 1099-R instructions have no provision for retro-reporting, so I'd say issue based on the year actually distributed.

[Lou S.]

The penalty applies to the year the distribution was not taken. (though you can request a waiver which I hear is often granted)

The distribution is income in the year it is actually taken.

[Guest Quicksilver]

Thanks for the replies-- 2 different answers- I copied the instructions below and question if they only deal with the 10% penalty and not the tax on the distribution itself?

Part VIII—Additional Tax

on Excess Accumulation

in Qualified Retirement

Plans (Including IRAs).

You owe this tax if you do not receive

the required minimum distribution from

your qualified retirement plan, including

an IRA or an eligible section 457

deferred compensation plan. The

additional tax is 50% of the excess

accumulation—the difference between

the amount that was required to be

distributed and the amount that was

actually distributed. The tax is due for

the tax year that includes the last day

by which the minimum required

distribution is required to be taken.