IRA RMD
This is not a good time to sell IRA fund shares to meet RMD
requirements.
I have heard that I can just transfer the RMD $ amount of a
fund from my IRA into my non IRA fund account without
selling the shares.
This would meet the RMD requirement while still holding the
fund shares to sell at some future time if I wish instead of
now when the market is down. I would still pay the taxes on
the RMD amount.
Please confirm that this is a good legal solution.
Permalink Submitted by mk foss on Wed, 2008-10-22 16:36
Your solution is perfectly legal. You pay tax based on the fair market value of the security transferred from your account.
Once the security is in the nonqualified account, the holding period starts with the distribution date and the tax basis is the FMV you paid tax on.
Permalink Submitted by Alan Spross on Wed, 2008-10-22 20:27
Too bad the politicians or advisors did not seem to be aware of this when selling their ideas of RMD relief so seniors would “not be forced to sell shares” at a bad time……..
Permalink Submitted by Al Fry on Wed, 2008-10-22 20:41
There are a couple of bills in the hopper to offer some relief. One suggestion I made is to allow the IRA owner to use the 12/31 or current value. Don’t know how far it got.
Permalink Submitted by Janine Janine on Fri, 2008-10-24 14:46
“I have heard that I can just transfer the RMD $ amount of a
fund from my IRA into my non IRA fund account without
selling the shares.”
This was the advice we received from both Fidelity and Vanguard. This is a solution for those who do not need the money currently. However, some retirees need the RMD for current expenses. After all, that was the purpose of IRA’s, was it not?
Perhaps if everyone affected or anyone at all with empathy faxed, phoned, wrote to his/her senators and representatives, perhaps, just perhaps, Congress would realize the enormity of the problem and enact legislation to provide relief from requiring the RMD to be based on 12/31/07 or even waive the RMD for 2008!!!! However, the government will need huge amounts of money to meet its current debts and its future obligations with all the “programs” promised by each of the presidential candidates, so let the retiree be damned!