RMD Question
Have a client who is of age and subject to an RMD …
The closing value of the account (2011) would dictate that the account has an RMD of appx $1100.00 …
The question is, the client since the first of the year has shot themselves in the foot with there investment/trading and the current value (all cash currently) is under the RMD amount … The client will at this point, close the account by having the remaining amount distributed … The key is, being that the amount distributed is under the RMD total, does the client have to do anything to explain why the RMD amount was not met ??
Thank you –
Permalink Submitted by Alan Spross on Tue, 2012-06-12 01:09
Greg,
There is no guidance from the IRS with respect to disclosing the exhaustion of TIRA assets.
There will be no 5498 issued showing an account balance for the final RMD year for any TIRA, and the IRS will know that the entire balance was distributed. That said, it might help to include an explanatory statement that all TIRA acccounts have been exhausted before completing the annual RMD.
Of course, if the client has any other IRA accounts, then they must make up the RMD shortfall from the other IRA accounts.
Permalink Submitted by Gregg Guiol on Tue, 2012-06-12 13:21
Alan –
Thanks for the answer … Your assistance is always appreciated !!!
Gregg Guiol