RMD / 2009
Client with pension who is retired many yrs is born 2/1/1939. Turned 70 /1/2 in 2009 but obviously no RMD required. In 2010 is the only RMD the 2010 RMD or is there one needed for 2009 as well.
Client with pension who is retired many yrs is born 2/1/1939. Turned 70 /1/2 in 2009 but obviously no RMD required. In 2010 is the only RMD the 2010 RMD or is there one needed for 2009 as well.
Permalink Submitted by Alan Spross on Tue, 2010-12-28 18:26
Chuck,
Just the 2010 RMD because the 2009 distribution year RMD was waived.
Now if client turned 70.5 in 2008 and had delayed the 2008 RMD until 4/1/2009, that 2008 RMD still needed to be taken out in 2009 since it was the 2008 RMD.
Your client essentially avoided the RBD decision to take or delay the first RMD because of the 2009 waiver.
Permalink Submitted by charles lore on Tue, 2010-12-28 18:43
Thanks Alan
Permalink Submitted by Alan Alan on Wed, 2010-12-29 21:36
Hi, same situation as the original poster… For someone who turned 70.5 in 2009 and had the 1st RMD waived in 2009, what is the deadline for the 2010 RMD – is it still April 1 of the next year (2011 with it being the first RMD ever) or is it December 31, 2010?
Spoke to Vanguard Funds (IRA custodian) and they think that it is April 1, 2011. Would like to postpone the RMD until the next year but would not want to pay the excise tax on it.
Thanks in advance!
Permalink Submitted by tomd37 on Wed, 2010-12-29 21:55
Mask,
The 2010 RMD must be taken by December 31, 2010.
If the person attained age 70.5 in 2009 the required beginning date for the 2009 RMD was April 1, 2010. That is the date for the 2009 RMD, but since the 2009 RMD was waived there was no need to take it. The 2010 RMD is due by December 31, 2010, just a couple of days from now. Sorry for the bum information from Vanguard, assuming the understood the question correctly.
Tom D.
Permalink Submitted by Alan Alan on Wed, 2010-12-29 22:36
Tom, thanks! So, the 2009 is still being treated as the first year even though the requirement was waived? Just curious, is there an IRS guidance on this? I could not find anything definitive on the web one way or another.
Permalink Submitted by Alan Spross on Wed, 2010-12-29 23:22
What you are looking for is on the bottom of p 26 and top of 27. This document is the technical explanation of WRERA, the tax legislation that enacted the 2009 RMD waiver. It clarifies that 2009 is still treated as the first year for RMDs notwithstanding that 2009 RMDs were waived. Therefore, the rules for later years are not affected and the 2009 waiver does not otherwise change the RBD:
http://www.jct.gov/x-85-08.pdf
Permalink Submitted by Alan Alan on Thu, 2010-12-30 01:00
Thanks, Alan! Hello, Vanguard… 👿