Rmd's

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  • Consultant
    Member
    • Mar 2014
    • 38
    #1

    Rmd's

    Client has a 401 & IRA. Over 701/2. RMD for the IRA was not taken. (Oversight)
    RMD for the 401 was not only taken but additional amount also. This
    amount was enough to cover the RMD for the IRA. Is this a valid transaction?

    Jack "Consultant"
    Tags: None
    • TaxGuyBill
      Senior Member
      • Oct 2013
      • 2321
      #2
      No, the RMD for the IRA can not be taken from a 401k account.

        Comment

        • Consultant
          Member
          • Mar 2014
          • 38
          #3
          RMD's

          Thanks. I was not sure
          Jack

            Comment

            • TaxGuyBill
              Senior Member
              • Oct 2013
              • 2321
              #4
              Retirement plan and IRA required minimum distributions FAQs | Internal Revenue Service
              https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#5
              Find out about required minimum distributions on your retirement plan under Internal Revenue Code sections 401(a)(9), 408(a)(6) and 408(b)(3) and how much and when to withdraw.

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                • JohnH
                  Senior Member
                  • Apr 2007
                  • 5339
                  #5
                  A 401(k) withdrawal sufficient to cover both the 401(k) and IRA doesn't meet the requirements. But it would be a powerful argument to submit in requesting a waiver of the additional tax. (Although it's my understanding that these waivers are generally granted freely anyhow if the conditions are met). But I'd be sure to take the missed withdrawal from the IRA along with the regular IRA withdrawal in the current year, because everyone always says that's the key to getting the waiver approved anyhow. They are looking for you to substantiate "reasonable error" and "reasonable steps to remedy the shortfall."
                  Last edited by JohnH; 06-18-2018, 04:12 PM.
                  "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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