RMD from Illiquid REIT
What do you do if your IRA funds are all in a REIT that is not liquid (because you own percentages of the investment) and does not create enough cash? How do you take the RMD?
What do you do if your IRA funds are all in a REIT that is not liquid (because you own percentages of the investment) and does not create enough cash? How do you take the RMD?
Permalink Submitted by Alan - IRA critic on Sat, 2016-12-17 17:54
Your % ownership needs to be under 50% or you may have a prohibited transaction by placing the shares in your IRA. If ownership is less than 50%, perhaps you could distribute enough shares out of your IRA in kind to a taxable brokerage account. This would satisfy the RMD. Or you would have to sell the shares when permitted and raise cash in your IRA to meet the RMD. You cannot ask the IRS to waive the 50% late RMD penalty until you have made up all delinquent RMDs.