Coleboy1 Posted January 3, 2024 Posted January 3, 2024 An RMD was requested on 12/29/2023. The fund company didn't process it until 1/2/2024. They said a 2024 1099-R will be generated since the distribution wasn't actually done until 2024. How is the handled by the participant regarding his taxes? He is expected to reflect a 2023 RMD but will not have a 1099-R to show for it. in 2024, he will end up with 2 1099-R's.
Popular Post C. B. Zeller Posted January 3, 2024 Popular Post Posted January 3, 2024 If the amount was distributed in 2024 then it is taxable in 2024. Sorry to say, but waiting until the last minute caused this individual to miss their RMD for 2023. Play stupid games, win stupid prizes. At least the missed RMD was timely corrected and the excise tax is reduced to 10% under the new SECURE 2.0 rule. They could also request a waiver of the excise tax on Form 5329. acm_acm, ugueth, CuseFan and 4 others 7 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
Popular Post Paul I Posted January 3, 2024 Popular Post Posted January 3, 2024 If this was the first RMD due, then the participant had until April 2024. The year of taxation will still be in 2024, but there will be no penalty. If this was not the first RMD, then definitely the participant should have known better. It was not their first rodeo. Luke Bailey, Bill Presson, Lou S. and 2 others 5
Belgarath Posted January 5, 2024 Posted January 5, 2024 We just had one that was very timely submitted, (early December) and the custodian botched it. Didn't cut the check until 1/2. To give them credit, they said, in writing, that if the IRS won't waive the 10% penalty, then they will pay it. I'd be a little surprised if the IRS won't waive in such a situation. Historically, at least in my experience, they have been very reasonable about this type of thing. Lou S. and ugueth 2
Lou S. Posted January 5, 2024 Posted January 5, 2024 I had a good one at lunch. My wife's old boss has an inherited IRA and Fidelity told him earlier this year his RMD is X; he takes X plus some more a few months ago. He just happened to log on to his account on 12/28 and Fidelity has a note your have only taken 95% of your RMD and it says he's $273 short. So he says OK, sets up a withdrawal for $273 to cover it, whatever. Gets a note - it's too late to process in 2023 it went out 1/2/24. It's not the money since I told him the penalty is $27, he's just upset at Fidelity somehow changing the amount he needed to take and if they notified him he didn't see it. We have no idea why, he's going to call them but my guess is since it's an inherited IRA where he was not the spouse they had the wrong divisor the first time.
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