Couple got divorced last year – via court decree “split” the husband’s IRA – transferring a portion of his account to his former spouse.
Husband, in 2017, was > 70 1/2 – he didn’t take his RMD prior to the “split”
I assume he is still responsible for his 2017 RMD – correct? In other words the transfer to his Ex’s IRA does not satisfy his 2017 RMD – correct?
Thank you
thrown a curve-ball – hence another questionThe decree stated the split should happen based on the IRA value sometime in November 2017. However the funds were not deposited into the former spouses account until January 2018. Further, the wife is also subject to RMDs Question – When calcuating the 2018 RMD do we include the funds that were in transit on 12/31/2017. In other words do we add those dollars to the 2017 year end value to determine the 2017 RMD? I am aware certain funds are added back such as recharacteizations and 60 day rollovers – I am unsure how to proceed in this scenario Thank you
The Nov valuation date would just result in the transferred amount likely being somewhat less than 50% of the account value at the time of the transaction a month later, but would not otherwise have any effect on the RMDs. Usually, a direct transfer is not going to be outstanding (not in either account), but if that is what happened as of the 12/31 date, then the transferred amount does have to be added to the wife’s 12/31 value for purposes of calculating her 2018 RMD.
Permalink Submitted by Alan - IRA critic on Tue, 2018-01-23 16:56
That is correct, since the transfer was done by direct non reportable transfer, which is not a distribution. His 2017 RMD remains unchanged for 2017, but will drop for 2018 because the transfer before year end 2017 will reduce his 121/31/2017 IRA balance. Since he is delinquent on the 2017 RMD, he needs to distribute it soon and can file the 5329 requesting the penalty waiver with his 2017 tax return.