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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
For more details, see Notice 2002-27 on page 814 of
I.R.B. 2002-18 at
IRS.gov/pub/irs-irbs/irb02-18.pdf, as
clarified by Notice 2003-3 on page 258 of I.R.B. 2003-2 at
IRS.gov/pub/irs-irbs/irb03-02.pdf.
Inherited IRAs. In the year an IRA participant dies, you, as
an IRA trustee or issuer, must generally file a Form 5498 and
furnish an annual statement for the decedent and a Form
5498 and an annual statement for each nonspouse
beneficiary. An IRA holder must be able to identify the source
of each IRA they hold for purposes of figuring the taxation of
a distribution from an IRA. Thus, the decedent's name must
be shown on the beneficiary's Form 5498 and annual
statement. For example, you may enter “Brian Willow as
beneficiary of Joan Maple” or something similar that signifies
that the IRA was once owned by Joan Maple. You may
abbreviate the word “beneficiary” as, for example, “bene.”
For a spouse beneficiary, unless the spouse makes the
IRA their own, treat the spouse as a nonspouse beneficiary
for reporting purposes. If the spouse makes the IRA their
own, do not report the beneficiary designation on Form 5498
and the annual statement.
An IRA set up to receive a direct rollover for a nonspouse
designated beneficiary is treated as an inherited IRA.
FMV. On the decedent's Form 5498 and annual statement,
you must enter the FMV of the IRA on the date of death in
box 5. Or you may choose the alternate reporting method and
report the FMV as of the end of the year in which the
decedent died. This alternate value will usually be zero
because you will be reporting the end-of-year valuation on
the beneficiary's Form 5498 and annual statement. The same
figure should not be shown on both the beneficiary's and
decedent's forms. If you choose to report using the alternate
method, you must inform the executor or administrator of the
decedent's estate of their right to request a date-of-death
valuation.
On the beneficiary's Form 5498 and annual statement, the
FMV of that beneficiary's share of the IRA as of the end of the
year must be shown in box 5. Every year thereafter that the
IRA exists, you must file Form 5498 and furnish an annual
statement for each beneficiary who has not received a total
distribution of their share of the IRA showing the FMV at the
end of the year and identifying the IRA, as described above.
However, if a beneficiary takes a total distribution of their
share of the IRA in the year of death, you need not file a Form
5498 or furnish an annual statement for that beneficiary, but
you must still file Form 5498 for the decedent.
If you have no knowledge of the death of an IRA
participant until after you are required to file Form 5498 (May
31, 2025), you are not required to file a corrected Form 5498
or furnish a corrected annual statement. However, you must
still provide the date-of-death valuation in a timely manner to
the executor or administrator upon request.
In the case of successor beneficiaries, apply the
preceding rules by treating the prior beneficiary as the
decedent and the successor beneficiary as the beneficiary.
Using the example above (Brian Willow as beneficiary of
Joan Maple), when that account passes to Brian's successor
beneficiary, Maurice Poplar, Form 5498 and the annual
statement for Maurice should state “Maurice Poplar as
beneficiary of Brian Willow.” The final Form 5498 and annual
statement for Brian Willow will state “Brian Willow as
beneficiary of Joan Maple” and will show the FMV as of the
date of Brian's death or year-end valuation, depending on the
method chosen.
For more information about the reporting requirements for
inherited IRAs, see Rev. Proc. 89-52, 1989-2 C.B. 632.
Disaster relief reporting. Special rules apply to tax-favored
withdrawals, income inclusion, and repayments for
individuals who suffered economic losses as a result of
certain major disasters. See
Disaster-Related Relief in Pub.
590-B, for more information.
For information about disaster relief available in your area,
including postponements, go to IRS News Around the Nation.
See the instructions for boxes 13a through 13c for
reporting postponed contributions, later.
Special reporting for U.S. Armed Forces in designated
combat zones. A participant who is serving in, or in support
of, the Armed Forces in a designated combat zone or
qualified hazardous duty area has an additional period after
the normal contribution due date of April 15 to make IRA
contributions for a prior year. The period is the time the
participant was in the designated zone or area plus at least
180 days. The participant must designate the IRA
contribution for a prior year to claim it as a deduction on the
income tax return.
Under section 219(f), combat zone compensation that is
excluded from gross income under section 112 is treated as
includible compensation for purposes of determining IRA
contributions.
A qualifying participant is:
•
Serving or has served in a combat zone;
•
Serving or has served in a qualifying hazardous duty area;
or
•
Serving or has served in an active direct support area.
If a qualifying participant designates an IRA contribution
for a prior year, other than an IRA contribution made by April
15 for the preceding year, you must report the type of IRA
(box 7) and the amount on Form 5498. Report the amount
either for (1) the year for which the contribution was made, or
(2) a subsequent year. See the instructions for boxes
13a,
13b, and 13c, later.
1. If you report a contribution for 2024 made before April
15, 2025, no special reporting is required. Include the
contribution in box 1 or 10 of an original Form 5498 or of a
corrected Form 5498 if an original was previously filed.
2. If you report the contribution on Form 5498 in a
subsequent year, you must include the year for which the
contribution was made, the amount of the contribution, and
one of the following indicators.
a. Use “EO13239” for Afghanistan and those countries in
direct support, including Djibouti, Jordan, Kyrgyzstan,
Pakistan, Somalia, Syria, Tajikistan, Uzbekistan, and Yemen.
b. Use “EO12744” for the Arabian Peninsula, including air
space and adjacent waters (the Persian Gulf; the Red Sea;
the Gulf of Oman, the Gulf of Aden; the portion of the Arabian
Sea that lies north of 10 degrees north latitude and west of 68
degrees east longitude; the total land areas of Iraq, Kuwait,
Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab
Emirates; Lebanon, and Turkey east of longitude 33.51E),
and Jordan, which is in direct support of the Arabian
Peninsula.
c. Use “EO13119” or “P.L.106-21” for the Federal
Republic of Yugoslavia (Serbia and Montenegro), Albania,
Kosovo, the Adriatic Sea, and the Ionian Sea north of the
39th parallel. (Note. The combat zone designation for
Montenegro and Kosovo (previously a province within Serbia)
under Executive Order 13119 remains in force even though
20
Instructions for Forms 1099-R and 5498 (2024)