IRA Fund Distributions After age 59 1/2, and before April 1 of year following age 70 1/2

This has no impact on your RMD (except that you've reduced the account a bit, and RMD is based on the balance from prior year end)

If Nov 08 is your 70.5 date, you mean Apr 09 for 08 RMD and then by Dec 09 for the 09 RMD. (i.e you will have two distributions if you wait till Apr)

See

further details on this. Also, consider converting someIRA money each year to a Roth IRA, depending on your taxbracket, this may save you money in the long run, and smoothout the RMDs a bit as the RMD numbers continue to rise. JOE

snipped-for-privacy@hotmail.com (askalot) posted:

You mean, I'm sure, to say "on which no taxes have been _paid_.

Actually, the rule states that you must take a calculated RMD (Required Minimum Distribution) by April 1 of the year following the tax year in which you reach age 70 1/2. In the example given, that would be by April 1 of _2009_. However, that would result in a "double dip" requirement for

2009, since you would also be required to take an RMD that year. So, most advisors would recommend taking the distribution in the year required (or 2008, in your instance). Otherwise, you might be kicked into a higher marginal bracket for 2009 by the "double dip."

No. Absolutely not. As with all other tax issues, the income must be reported in the year received. So whenever you took those earlier distributions, you should have included them in your taxable income for the appropriate year (as I'm sure you did, because the trustee would have sent you a 1099 for the amount distributed). Bill

In your first sentence delete the words "on which no taxes have been withheld." You must start taking your RMD from a traditional IRA in the year you attain age 70 1/2. You may delay the first RMD until 4/1 of the next year without incurring penalty. If you turn age 70 1/2 in 11/08, your first RMD must be taken no later than 4/1/09. Any distribution you take in

2008 will count as part of your RMD. Any distributions taken prior to 2008 do not count against your RMD.

One of those year dates is incorrect I think. If the first is correct, then you will need to take 2008's distribution before April 1 2009.

Nope. Minimum required is based on previous 12/31 balances.

Holiday ChEAr$, Harlan Lunsford, EA n LA

I think you meant April 1, 2009. The exact amount required will be based on your account balance as of December 31,

2007.

Absolutely NOT.

Close enough. Actually, April 1 is timely.

I don't know whether this is a typo or you're confused. If you turn 70 1/2 in 2008, you must take a distribution for

2008 by 4/1/2009. You also must take a distribution for 2009 between 1/1/2009 and 12/31/2009.

No. Your 2008 required distribution will be based on your

12/31/2007 account balance and must be taken between 1/1/2008 and 4/1/2009. See IRS Publication 590.

While you can delay your 2008 distribution until 2009, you would then have to take two years' distributions in 2009. This could lead to an unwelcome spike in your 2009 income, depending on what amounts we're talking about. Some people try to withdraw enough each year between 59 1/2 and 70 1/2 to reach the top of the current bracket, thus reducing the balance that will be subject to the minimum distributions. It really depends on your overall situation and plans and needs for the IRA funds. Converting a portion to Roth each year is also an option if you are eligible. That also reduces the balance subject to mandatory distribution, and Roths don't have required distributions. If the amounts are significant, you might benefit from a session with a fee-based financial planner.

-- Phil Marti Clarksburg, MD