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50% Penalty Waiver for RMDs not taken during year (Sec. 4974)

  • 1.  50% Penalty Waiver for RMDs not taken during year (Sec. 4974)

    Bronze Most Valuable Member
    Posted 26 days ago
    If a client does not take an IRA RMD for 2018, and files an extension until October 15, 2019 in the hopes of receiving it prior to October 15th, and doesn't receive it by then, does the 50% waiver from penalty still apply, so long as he receives the RMD prior to filing the tax return , or does he forfeit the 50% waiver because it wasn't received by the extension due date?
    The client has been made well aware of the requirement to also take a 2019 RMD in 2019.

    AIRMONT, NEW YORK 10952-3816
    TEL 845-357-8770
    FAX 845-357-1437

  • 2.  RE: 50% Penalty Waiver for RMDs not taken during year (Sec. 4974)

    Posted 25 days ago
    I'm pretty sure that the return extension does extend the time to take the prior year RMD. The only way to avoid the penalty, is to file form 5329 with the return and complete section IX requesting a waiver for reasonable cause ( see instructions), include a reasonable cause waiver request statement and don't add the penalty to the return.
    They will end up taking two RMD's in 2019.


    Gerald S. Cohen, CPA
    cell 516 455-0643

  • 3.  RE: 50% Penalty Waiver for RMDs not taken during year (Sec. 4974)

    Silver Most Valuable Member
    Posted 25 days ago

    You can request a waiver with a reasonable cause  Here are the instructions:


    Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows. 1. Complete lines 52 and 53 as instructed. 2. 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. 3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55. The IRS will review the information you provide and decide whether to grant your request for a waiver.


    Very truly yours,






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