NUA and RMD
Taxpayer turning 70 1/2 this year. Has $2 million in 401(k), including $1.2 million worth of employer stock. Taxpayer wants to take advantage of NUA rules, move employer stock to a taxable account, roll the balance of the 401(k) to a rollover IRA, all before the end of this year.
Question: Must taxpayer take an RMD from the 401(k) based on 12/31/2014 value of 401(k) including employer stock before he rolls the balance to an IRA?
Thank you,
Art Dicker
Permalink Submitted by Arthur Dicker on Wed, 2015-06-24 14:31
Does the transfer of the employer stock to a taxable account satisfy the 2015 RMD requirement?
Permalink Submitted by Arthur Dicker on Wed, 2015-06-24 14:35
that is, assuming that the taxable amount of the NUA basis is more than the RMD amount.
Permalink Submitted by Alan - IRA critic on Wed, 2015-06-24 18:19
Yes, both the cost basis and the NUA component of the employer shares counts toward the RMD when distributed as long as the IRA rollover is not done prior to the distribution of company shares. If taxpayer waited until 2016 to do the lump sum distribution, and did not take any distribution in 2015, there is more than enough value in the shares to cover both the 2015 and 2016 plan RMDs. At least enough to cover the 2015 RMD would have to be distributed no later than 4/1/2016.