RMD in 2020

Hi folks...So I've been reading that RMDs will be optional in 2020. Does anyone know if this rule is binary or not? For example if my 2020 RMD is calculated to be $10,000, could I just take $5,000 or do I have to take the full amount ($10,0000) or zero?..TIA, Ron

Reply to
oitbso
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The RMD isn't optional for 2020, it doesn't exist. It's waived, suspended, gone. There is no RMD for 2020. So you can take any amount that you like out of your IRA in 2020, but the amount you take is not an RMD or part of an RMD, because there is no RMD in 2020.

Bob Sandler

Reply to
Bob Sandler

For distributions, it means you are not required to do anything or prohibited from doing anything. You can take a distribution of any amount from zero to your account balance.

Reply to
BignTall

Since it is optional, my understanding is you don't have to take it. But you can always take some or all of it (or even more) if you want to. That would reduce the amount you'd have to take in future years since you'd be reducing the total pool you have to draw from in the furure.

In a year where the RMD is actually required, you have to take that amount as a minimum, but you could always take more if you want to (and again it would reduce the amount you'd need to take in future years since the base amount would be less).

In a year where you take more than the required amount, you could always take the excess amount and convert to a Roth if you didn't actually need the funds.

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Reply to
Rick

Just to add..... because there are no RMDs, a distribution that normally would be an RMD for a individual, becomes an eligible rollover distribution subject to all the normal rules for rollovers.

Reply to
Alan

Surely, there is a reference that confirms all this, right?

Reply to
zvkmpw

Public Law 116-136, Section 2203.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

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Reply to
Stuart O. Bronstein

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Reply to
Rick

Glad I perused this newsgroup. I'm usually up on this stuff but I missed it completely amid all the virus reporting!! Two queries:

1) I saw no mention of 403B. Is this included in the RMD elimination.

2) I take my RMD in equal monthly payments. I assume I can just stop them? (ie: such payments are part of the elimination. I understand that folks who annuitize are not included?)

Mel

Reply to
MZB

Yes, it applies to all RMDs. If you've already taken an RMD and it's within the 60 day rollover window, you can restore it to the retirement account.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

But that does not apply to withdrawals (previously RMDs) from a non-spousal inherited IRA. Right?

IRA Pub 590-A states: ``If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you cannot make any contributions to the IRA. It also means you cannot roll over any amounts into or out of the inherited IRA``.

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And beware if we have made withdrawals (previously RMDs) from multiple IRAs. Right?

Normally, we are limited to one rollover per 1-year period (calendar year? fiscal tax year?) for all IRAs.

Any word on whether the IRS is considering or has decided to suspend the one-per-year rollover limitation?

If not, can we "aggregate" the several withdrawals into one contribution (rollover) into one IRA?

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Also, any word on whether the IRS is considering or has decided to automatically waive the 60-day requirement?

IRS Pub 590-A states: ``The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond your reasonable control``.

We can always apply for an individual waiver. But that is time-cosuming and potentially costly.

Reply to
joeu2004.5

All required distributions for 2020 have been suspended including those from non-spouse inherited IRAs. This suspension also applies to all retirement plans with RMDs (401k, 403b, 457, etc.)

In the guidance released so far, the IRS has not relaxed the one rollover per 12 month rule.

However, any distribution taken after February 1 can be returned to the account by July 15 without penalty. This is a consequence of Notice 2020-23 which extended the due date of all time critical actions that would fall between April 1 and July 15 to July 15. (The "60 day" period won't expire until July 15.)

I wouldn't be surprised if there are additional changes as some of these issues come to light.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

Yes. But I was addressing the comment: ``If you've already taken an RMD and it's within the [...] rollover window, you can restore it to the retirement account``.

The ability to "restore" a withdrawal that was already taken depends on the rollover feature.

But we have never been able to roll over into or out of a non-spousal inherited IRA, according to the IRS Pub 590-A passage that I quoted previously. This is confirmed by 26 USC 408(d)(3)(C).

So unless an exception is made for "federally-declared disasters" in general or for the COVID-19 pandemic specifically, I do not see how we can "restore" withdrawals to non-spousal IRAs per se.

ira smilovitz wrote:

Too bad! But according to your comment below, I can give the IRS more time to do that (wink).

ira smilovitz wrote:

Thanks for the citation to that IRS Notice.

I was able to find it online, as well as 26 CFR 301.7508A-1(c)(1)(iii).

ira smilovitz wrote:

And I'll keep hoping for that, especially with regards to the one-per-year rollover limitation.

Thanks again.

Reply to
joeu2004.5

Regarding the non-spousal, inherited IRA: You are correct that IRC Section 408(d)(3)(C) specifically bars rollovers in these accounts. I have no idea why Congress felt this was necessary, but it is what it is. If this issue is important to you (and of sufficient monetary impact), I would pursue getting a legal opinion from competent counsel. There may be a loophole somewhere and this isn't the sort of issue you should be accepting the opinion of an unknown internet poster.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

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