RMD when changing custodian
Am I correct in believing that my client who is 83 years old and is doing
a direct transfer of an IRA from another custodian must take his
RMD from his current IRA before transfering it to our custodian?
Am I correct in believing that my client who is 83 years old and is doing
a direct transfer of an IRA from another custodian must take his
RMD from his current IRA before transfering it to our custodian?
Permalink Submitted by Alan Spross on Tue, 2010-06-01 21:45
No. If the transfer is done directly, it is not considered to be a distribution and therefore is not subject to Sec 401(a)(9) with respect to RMDs. But the RMD must then be satisfied by a distribution from the transferee IRA or another IRA owned by the taxpayer.
The first IRA distribution IS deemed to satisfy the RMD, but as stated above direct transfers are NOT considered distributions and are not reported on Forms 1099R or 5498 either.