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Inherited IRA? Do I need to file a 1099R with my Taxes?

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My mother sadly passed away in 2017. In May - June 2018 I inherited my mom's IRA. I did not touch the IRA. I did not remove any money from the IRA. Merrill Lynch did not send me a 1099R. Tomorrow is the tax deadline and I'm ready to file but I'm worried about not including a 1099R in my tax return. I've read that if I did not touch the IRA I do not need to include a 1099R in my tax return. I am not sure. Would a tax expert please let me know what the law is? I would greatly appreciate your help. Thank you.
 


LdiJ

Senior Member
My mother sadly passed away in 2017. In May - June 2018 I inherited my mom's IRA. I did not touch the IRA. I did not remove any money from the IRA. Merrill Lynch did not send me a 1099R. Tomorrow is the tax deadline and I'm ready to file but I'm worried about not including a 1099R in my tax return. I've read that if I did not touch the IRA I do not need to include a 1099R in my tax return. I am not sure. Would a tax expert please let me know what the law is? I would greatly appreciate your help. Thank you.
Did you roll the IRA over into an IRA of your own? Or did you just leave the IRA in her name? It would not have been proper for you to leave the IRA in her name and if you rolled it over into an IRA in your name you should have taken a RMD which means that you should have received a 1099R.

Bottom line, you waited far to long to ask this question. You should have been asking about it before the end of 2018.
 
Thank you for asking clarifying questions. I did not have my own IRA but I rolled over my mom's IRA into my name. I did not leave the IRA in her name. (My Mistake. See replies below.) I do not know what an RMD is and so, no, I did not take an RMD. Yes, I waited too long to ask this question. I hope I am not screwed. I need this figured out by tomorrow. What do I need to do now? Thanks.
 
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FlyingRon

Senior Member
You have to specifically have it rolled directly into a new inherited IRA. You can not take the cash directly or put it in an existing IRA and you can't make contributions into the inherited IRA account. It's not clear if this is what you did or not.

RMD = Required Minimum Distributions. You are required to take a certain amount out (and pay taxes for a conventional IRA). The rules on the RMD's are different than for regular IRAs (which you can avoid making distributions from until you are 70 1/2).

A 1099R implies you did get a distribution from the IRA. You don't have to submit the 1099, but you do have to reflect that amount on your return.
 

davew9128

Junior Member
I don't know what I'm trying to say. I took my mom's IRA and opened it up under my name? Anyway, the IRA is in my name now.
An inherited IRA can never BE in your name. You might be the beneficiary and it may reference you as beneficiary in the title, but it will always be your mom's IRA.
 
Yes, I double checked. My mom's name is on the IRA and I am listed under it. Here is what it says:

MLPF& S CUST FBO
MRS [name removed] DECD IRA
FBO MR [named removed]

So now what do if I have to do with my taxes? What form do I need to fill out? I did not take a RMD. Thanks.
 

FlyingRon

Senior Member
What does the 1099R say? If in block 2a the taxable amount is zero, you don't have to do anything. It's just reporting the rollower.

If it's something other than zero, than a distribution must have been taken somewhere, you'll have to report the amount and pay taxes on it.

If your mother died sometime in 2018, you weren't required to take an RMD. You will this year. If she died before 2018, you need to handle this.
 
As I said in the first post, my mom died in 2017. I did not take an RMD in 2018. How do I handle this? What do I need to fill out for my taxes?
 

FlyingRon

Senior Member
At this point, I'd just file my taxes without worrying about this (if you haven't already) and give the tax preparers a few days of rest and then go see them. The way to calculate what the RMD should have been isn't exactly straightforward but you want to get the numbers right because the penalty is pretty dang severe (50%).
 
So I do have some answers though I'm not sure I have the right answers. The good news is that Merrill Lynch reported nothing to the IRS and they did not send me any tax information because none was required in 2018. According to the tax experts at Merrill Lynch I do not have to file a 1099R because I did not take a RMD. Also my mom was 70 when she passed and she would've had to be 70 1/2 RBD (Required Beginning Date) to take out money. Apparently I have 5 years to deplete her account from the time of her death. I need to see a tax expert, that's for sure, but I think I barely escaped this one. I filed my taxes as I usually do. If any of what I said sounds wrong to you please let me know. Thanks.
 

FlyingRon

Senior Member
Right. If there is nothing in block 2a, this just reflects the rollover and isn't taxable (you don't have to report it at all).

I suspect you are right that no RMD was required for 2018. You'll need one this year.
 
Thank you for your help, Flying Ron. I do want to stay on top of this thread because I’m certain there are a lot of people who do not know what to do with Inherited IRA’s. Common wisdom is that whatever money you take out of your IRA you’re taxed 50% so it’s best not to touch it. Now I’m told I have to touch it or I have to pay a tax penalty. This just seems backwards and confusing to me. Even though I think I’m out of trouble for 2018 I will go see a tax expert within the next couple of weeks and get definite answers. I will post what I learn here hoping to help people in the same situation as myself. Even the tax expert at Merrill Lynch said this is a complicated tax issue. Why do I think that the IRS made this complicated on purpose? Hmm...
 
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