Timing of RMD
I’m over 70 1/2 and my IRA consists of 5 mutual funds. I’ve been taking my RMDs on 12/30 of each year and I’m considering moving the distribution date forward to 12/01. Should I be concerned about the year-end fund distributions that take place in December when making this timing decision?
Permalink Submitted by Alan - IRA critic on Fri, 2014-12-05 23:30
Only if you are taking the RMD “in kind” and not in cash. If you distribute shares and the fund declares a Dec dividend, you will owe taxes on the distribution. LT cap gain amounts could be considerable. It is a good idea to move the RMD date away from the end of the year, but be careful of distributing shares of a fund that will issue dividends or cap gains after the distribution and prior to year end.
Permalink Submitted by norm Fairhurst on Sat, 2014-12-06 22:44
Alan, your response helps me see the issue more clearly. Thanks.