illiquid assets and RMDs
I have a client with an inherited IRA and the sole asset is one of these non-traded REIT products. It throws off dividends but they will be insufficient to meet the RMD requirement this year. She’s had this one for quite some time, and it is not subject to the newer bene IRA rules. I’m unsure of what to do if I cannot meet the RMD requirements
Permalink Submitted by Alan - IRA critic on Wed, 2022-10-05 21:57
Client should have seen this coming some years in advance. The IRS is not sympathetic and may or may not consider this a “reasonable cause” for waiving the 50% penalty. Some possible options are to transfer the inherited IRA to a self directed IRA custodian who might be better able to find a buyer, or to assist in distributing units or shares of the holding to a taxable account in kind to satisfy the annual RMD. If partial distributions are not possible and the shares cannot be sold, a full in kind distribution may be required.