Taxpayer forgot to take his RMD for 2016, he took the 2016 on January 3, 2017 and then took RMD for 2017 on Jan. 6, 2017.. Will he report both RMD's on his 2017 return? Or does he have to amend, etc. his 2016. Realize appeal process.
bw
He has to report both RMDs on his 2017 return, because that's when he took them. He will include Form 5329 with Part IX filled out and an attached statement to request a waiver of the penalty. The instructions for Form 5329, on the last page, tell how to request the waiver.
Bob Sandler
replying to bh2os62, Doug wrote: On form 5329, Part IX instructions are a bit ambiguous, it states "Enter ?RC? and the amount you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54." Is the amount you want waived the total distribution or the amount of the penalty?
"The amount you want waived" that is referenced in the instructions is the amount of the distribution that wasn't taken, not the amount of the penalty. Now that you point it out, I think those instructions are worse than ambiguous. They're wrong. What you want waived is the penalty, but the amount you have to subtract on line 54 is the distribution, not the penalty.
Looking over this thread, I realize that there is an error in my earlier answer. In the situation described by the OP, Form 5329 has to be filed with the taxpayer's 2016 return, not 2017, because the penalty is owed for the year that the RMD should have been taken but wasn't. He still reports both RMDs as income in 2017, but he has to file Form 5329 for
2016.Bob Sandler
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