Immediate Annuity Dist and RMD
The client had 2 IRA’s in 2015. One was approx. 250k and the other was 450k. In January of 2016 he took 400k from the second IRA and funded and Immediate Annuity. So, his total IRA values for December 31, 2015 were 700k which is what his 2016 RMD is based upon. The immediate annuity was a transfer and not a distribution is not subject to RMD’s but does the income from the annuity count towards fulfilling the RMD? He’s receiving $2500 per month income from the immediate annuity.
Thanks,
Mike
Permalink Submitted by Alan - IRA critic on Tue, 2016-08-30 21:33
Since the annuity IRA was purchased in 2016, for 2016 ONLY the 2500 monthly payout will be applied to the total RMD, therefore only the difference needs to be withdrawn from the non annuitized IRA. For all years after 2016, the RMDs must be separately satisfied, so all annuity payouts are deemed to be RMD distributions for the annuity only.