RMD with Illiquid Real Estate Assets
Several investors have invested IRA funds in a REIT which has stopped distributions and is not providing any redemption options.
what if any options do these investors have regarding RMD. The can’t liquidate any funds …Help!
MRS
Permalink Submitted by Jose Morales on Fri, 2011-01-14 17:56
If they have absolutely no funds in an IRA from which they can satisfy their RMD, then it looks like they will be paying a 50% penalty on the RMD amount that they should have withdrawn. There is no relief from the RMD requirement just because someone chose to invest in a product that doesn’t allow access funds to cover an RMD.
Permalink Submitted by Alan Spross on Fri, 2011-01-14 18:06
Assuming the shares still have value, why not just distribute enough shares? The RMD does not have to be taken in cash. And of course, if investors have any other IRAs they can satisfy their RMD for all IRAs from some combination of the others.