RMD Balance to calculate
A client requested a rollover over of a 401k in 12/2014. The rollover took place and rolled into the IRA on 01/02/2015. He turned 70 ½ on 01/29/2015 and wants to take the RMD today for 2015. Is the only step needed to calculate the rmd is to go back to 401k plan and request the 401k balance as of 12/31/2014? Thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2015-06-17 18:28
Assuming client had retired before the distribution request and did NOT receive a 1099R from the 401k plan for 2014, this was a 2015 direct rollover in an RMD distribution year. That means that the 401k RMD for 2015 has been satisfied, but the RMD amount was not eligible to be rolled into the IRA and must be removed from the IRA using the excess contribution rules. Client WILL need to determine the 12/31/2014 401k balance and/or secure that balance from the plan administrator in order to know how much of the IRA rollover was the RMD and therefore an excess IRA contribution. The situation will have to be carefully explained to the IRA custodian to get them to process and code the corrective distribution properly.