Required Minimum Distribution of IRA

[dyne]

A taxpayer who reaches age 70 1/2 on July 16, 2007 is allowed to make an IRA
contribution and deduct it on or before April 15, 2007 which is designated for the tax year 2006,
is he not? He also must begin a required minimum distribution from his IRAs during
the year 2007 or before April 1 of 2008. Therefore an IRA contribution (for the prior year) AND
a required minimum distribution MAY occur in the SAME tax year (2007).
IRC(d)(1) says:"No deduction shall be allowed under this section with respect to any
individual if such individual has attained age 70 1/2 before the close of SUCH individual
taxable year FOR which the contribution was made." Page 13-23 of the current
THETAXBOOK, page 13-23, second sentance appears to be wrong when it says "
No deduction is allowed for contributions in the year the participant turns age 70 1/2."
The "in" should be "for", should it not? True, no deduction is allowed for THAT tax year,
but a deduction is allowed for a contribution made that year if it is designated for the
prior year. What do you experts think? Am I correct?

[OldJack]

I don't see the problem you see as thetaxbook says "no deduction" in the year in (this case 2007). The deduction for 2006, although made in 2007 is not a deduction on the 2007 tax return.

[Bees Knees]

IRC Section 219(f)(3), “a taxpayer shall be deemed to have made a contribution to an individual retirement plan on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).”

In other words, a contribution that is made on April 15, 2007 and designated as a 2006 contribution is deemed to have been contributed on December 31, 2006. Thus since it is deemed to have been contributed in 2006 and the taxpayer does not turn age 70 ½ until 2007, there is nothing wrong with the statement that says “no deduction is allowed for contributions in the year the participant turns age 70 ½ ….” If it was designated a 2006 contribution, the contribution was deemed to have been made in 2006, not 2007.

[dyne]

Required Minimum Distribution

THANK YOU Old Jack and Bees Knees.