Client received notice from investor re: Minimum Distribution for 2014 on January 9, 2015. Obviously to late to meet the 12/31/2014 deadline. What are the clients options to avoid penalty?
-
-
Rmd
I believe they have until April 15 to take the distribution. -
April 1st exception for first year
For the year taxpayer turns 70 1/2, he/she has until April 1st of following year to take RMD. For all subsequent years, it must be taken by Dec. 31stComment
-
File form 5329 with a waiver attachment showing good cause for missing the RMD and corrective actions taken.Comment
-
Why did the client receive an RMD notice from an investor? Such notices are only sent to IRA owners by the IRA trustee.Originally posted by RayT
In any case, are you sure the notice is for the year 2014? Those IRS-mandated RMD advisory notices that are required to be mailed out to IRA owners age 70½ or older are always for the new year, not the year just ended. The notice your client received may be for the year 2015, not 2014.
* * * * * * * * * *
This might be a good time to mention that I do not like the content of that IRS-mandated notice. They all say pretty much the same thing, something like: "Your 2015 RMD is $x,xxx." What they don't say, but I believe they should, is: "We will not send the RMD amount to you unless you ask us to do so." I believe this is why many older people, who are neither tax savvy nor have a tax advisor to help them sometimes fail to take their RMD. The letters seem to imply that the RMD will automatically be distributed, but that is not actually the case. IMO the IRS should change the mandated wording of that letter (or IRA trustees should reword it on their own) to make it clear that the IRA owner still has to request his RMD ... either for that year alone or by giving the trustee standing instructions that will remain in affect every year until revoked.Roland Slugg
"I do what I can."Comment
Comment