RMD on profit sharing plan
We have a client that has a profit sharing plan for his business and is now at age 70 1/2. How does he calculate his RMD?
Thanks,
Jamie
We have a client that has a profit sharing plan for his business and is now at age 70 1/2. How does he calculate his RMD?
Thanks,
Jamie
Permalink Submitted by Alan Spross on Wed, 2008-12-10 20:07
Even if still working, a more than 5% owner must start RMDs at age 70.5, to be taken no later than the required beginning date. If he turned 70.5 this year, his age is based on his age as of 12/31/08, so that could be either 70 or 71. Using the correct age and the Uniform Table in Pub 590, the RMD would be the 12/31/07 value of the plan divided by the divisor from the Uniform Table.
That said, since this is his first RMD year, he does not have to take the 2008 RMD prior to year end, but he must take it no later than 4/1/2009, which is the required beginning date mentioned above.