Required Minimum Distributions
I have a client who has an IRA and a 401k plan and took his first RMD last year, but instead of taking an RMD from his 401k plan AND his IRA, he took all the $ from his 401k. I understand that one must take money from both the IRA and a 401k plan. Any suggestions on how to advise the client?
Permalink Submitted by Alan Spross on Thu, 2008-04-10 02:27
Your understanding is correct. All he can do now is to take the delinquent RMD from the IRA ASAP, file Form 5329 with his 2007 return and request relief from the excess accumulation penalty. See Pub 590, p 57 and Inst for Form 5329, p 6.
His “reasonable cause” statement would be that he thought he could satisfy both RMDs from his 401k.