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Form 5329 - Failure to take MRD on IRA

Technical topics regarding tax preparation.
#1
Anderly  
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Here is our situation. John died 7/30/18 at age 80 and did not take his MRD for 2018. The beneficiary of his IRA was the John Irrevocable Trust (Rev trust that became revocable at his death). The IRA custodian was unable to get the MRD for 2018 to the trustee until 1/10/19. We feel the trustee has reasonable cause to request waiver of penalty. The Trust is under a Section 645 election for a 6/30/19 YE due 10/15/19.

The Form 5329 is only an attachment to a Form 1040, not a 1041. Has anyone run into this situation before? I am thinking of preparing the 5329 with a full explanation and efiling it with the 2018 1040. Then I will save the Form 5329 and attach it as a PDF to the efiled return for the 6/30/19 1041. Does anyone have any other ideas, or had this issue before?

Thanks
 

#2
HowardS  
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I am thinking of preparing the 5329 with a full explanation and efiling it with the 2018 1040. Then I will save the Form 5329 and attach it as a PDF to the efiled return for the 6/30/19 1041

Just state on the explanation that the estate/trust has taken the MRD. No need for attachment.
Last edited by HowardS on 11-Oct-2019 2:30pm, edited 1 time in total.
I suffer from depreciation.
 

#3
Dbertke  
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It's my understanding Form 5329 still applies to the Trust. Not sure if you need to include the 5329 with the personal return, it is more applicable to the trust.

Obviously this is not authoritative guidance but you might find this link helpful

https://www.aicpa.org/interestareas/tax ... falls.html
 

#4
Anderly  
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HowardS - are you saying to just file the 5329 with the 1040, and nothing is to be filed with the 1041?

Dbertke, The link was helpful. The responsible party for the 5329 appears to be the trustee, however the 5329 isn't part of the 1041 efile program. I still think I will include it in both filings to be safe and timely. The interesting thing is that whether or not the MRD was received by 12/31/18 or 1/10/19 it is still reported on the same fiduciary return for the YE 6/30/19.
 

#5
HowardS  
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HowardS - are you saying to just file the 5329 with the 1040, and nothing is to be filed with the 1041

Yes, but if you want to file one with the 1041 too there is nothing wrong with that. I just think it's redundant.

<edit> Thinking more about this, it is the trustee's responsibility to take the MRD if the decedent didn't so I would reverse my advice and file a 5329 under the trust tax id rather than the decedent's. That way the trustee will have fulfilled his fiduciary responsibility. The 5329 can be filed standalone and still allow you to efile. The RMD deadline is still Dec 31 regardless of the trust tax year.
I suffer from depreciation.
 


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