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My husband passed away this April at 83. I’m 68 and sole beneficiary of his traditional IRA.  I was advised that it didn’t matter if I rolled his IRA into mine and then took his RMD for the year as long as I do so by 12/31/2018.  I rolled his IRA into mine early May.  I proceeded and took his RMD June 13.

I now understand that this could be a mistake. Should I file IRS  form 5329 with an explanation or file without it since I did take his RMD plus taxes.Thank you for any help you can give me.



The answer to your question lies in how you moved your husband’s account to your own. If you did a transfer, which means the funds went directly from his IRA to your IRA, then you have no problem. An IRA RMD can be transferred but it cannot be rolled over.

A rollover is when the IRA custodian issues a check payable to you. You have 60 days from the receipt of that check to redeposit the funds into the same or another IRA.

If you did a rollover, then you now have an excess contribution in your IRA. You have until October 15, 2019 to fix the excess contribution with no penalty and no additional tax reporting. You do have to do a net income calculation on the excess contribution amount and remove the excess contribution plus or minus the net income or loss. You have to tell the IRA custodian that you are removing an excess contribution so that they report it correctly to IRS. The distribution you took on June 13th did not fix your excess contribution problem and will be reported to IRS as a normal taxable distribution. You will also owe income tax on the excess contribution amount and on the earnings, if there are any.


I have a new client couple who made Roth contributions for the past ten years,… even though they were retired (i.e., no “earned” income).  They thought Social Security was “earned” income.  Accordingly, it appears they owe a 6% penalty on each contribution for each year the excesses were outstanding, which totals to a whopping $30,000.  Is there any way to mitigate that cost?  It seems excessively high for a truly “innocent”, though lengthy, error.

Any guidance would be greatly appreciated.



Unfortunately, IRS does not have the authority to waive the 6% excess contribution penalty. And, if the Form 5329 is not filed, the statute of limitations does not start to run on their excess contributions. The only correct way to fix the error is to file Form 5329 for each year, pay the “additional tax” (the penalty) and remove the excess contributions as soon as possible.


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Investment advisory services are offered through Boynton Financial LLC and is a State of Texas registered investment advisor.