RMD Question

The required RMD is based on the total value of all your IRAs as of the end of the prior year. That value is reported to the IRS, because the value of each of your IRA is reported to the IRS each year. So they know the amount and they know your age, so from that they can easily compute the required RMD amount. You can also loik it up yourself in an online table as long as you know all your IRA balances as of December

You can take the RMD anytime during the year you are required, and you also get a one-time extension to April 1st of the following year for the first year RMD only. And you can take the RMD in as many chunks during the 15 months as you like. You can also take more than the minimum amount if you want, though you won't get any credit for that the following year.

According to Boris snipped-for-privacy@invalid.invalid:

The IRA trustee files form 5498 with the IRS which reports contributions and withdrawals. Lines 11 and 12 show the RMD. The trustee need not give you or your adviser a copy of that form but they do have to provide the numbers to you.

You can spread it out over the year so long as the total is taken by the deadline, April 1 the year after you turn 73, Dec 31 otherwise. I gather it is common to take it monthly.

Also re the "First Year April 1 deadline", avoid it if possible, other wise you would be dong 2 RMDs in the second year. :-(

Also be sure to take enough Withholding Tax on the RMDs to avoid any underwithhoding penalty.

It's common for the IRA beneficiary to have a trust account as well. Monies distributed from the IRA are deposited into the trust account, then transferred into a checking account for personal expenses.

If monies in the trust account are invested similarly to the IRA, then there's no disadvantage to taking the entire RMD in a lump sum early in the following calendar year, then transferring to checking, say $5000 at a time, as needed.

If the RMD is high enough, withhold 90% of this year's estimated tax liability or 100% of last year's during December so it gets treated as having been evenly withheld throughout the year to avoid penalties and interest on quarterly estimated taxes that weren't timely paid.

According to Adam H. Kerman snipped-for-privacy@chinet.com:

Huh, I never heard of that. What's the point rather than scheduling the IRA distributions for when you want them?

My trustee (Vanguard) will do monthly, quarterly, or annual distributions, point and click and set it the way you want.

If you make significant charitable contributions, the Qualified Charitable Distribution path can be of value.

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Boris snipped-for-privacy@invalid.invalid wrote in news:XnsB2DCD0FF8F0FCBorisinvalidinvalid@135.181.20.170:

Thanks much to all that replied.

I contacted my CPA, who works with my financial advisor. My CPA gave me the exact RMD figures for both me and my wife. He will send us the proper forms to take our RMDs when we decide to do so, and we can direct where to deposit the distributions. Since our IRAs are held with Schwab, I assume our CPA will forward our completed RMD forms to Schwab.

Marc Auslander snipped-for-privacy@gmail.com wrote in news:tEJUP.811152$ snipped-for-privacy@fx17.iad:

Hello, Marc,

My advisor did suggest making a Qualified Charitable Distribution. At this time, though, I'm concerned about one of my adult children, and determining how I can make a gift to her. Four months after she purchased a home with a 2.99% mortgage, she got laid off from a well paying job. She has not been able to find employment and has used all of her sizeable 401(k) (un-beknowst to us).

I will be in contact with our estate planner and CPA about this issue soon.

Thanks.

According to Boris snipped-for-privacy@invalid.invalid:

I think you will find that you just give her the money, regardless of whether it comes from your IRA or anywhere else.

If you give her more than $19,000 ($38K if the gift comes jointly from your spouse) you will have to file a gift tax return on Form 709, although no tax is due.

"John Levine" snipped-for-privacy@taugh.com wrote in news:1002u0t$ptn$ snipped-for-privacy@gal.iecc.com:

Yes, that's what I'm learning.

No tax is due assuming you have not met your lifetime maximum, which I think is around $14 million.

According to Rick snipped-for-privacy@nospam.com:

If someone has $14 million, I hope he or she's getting tax advice from a qualified lawyer or accountant rather than asking random strangers on usenet.

Fair point, but it's not that you have $14 million but that you've already given away that much during your lifetime.

"John Levine" snipped-for-privacy@taugh.com wrote in news:1004vks$17eb$ snipped-for-privacy@gal.iecc.com: