Annuitization RMD issue
OK I have searched and I understand that if annuitized the distributions do not cover RMD for any other IRA other than the one annuitized.
I read that its stated in Tre. Reg. 1-401(a)(9)-6 and thus I have looked this ( http://edocket.access.gpo.gov/cfr_2010/aprqtr/26cfr1.401(a)(9)-6.htm ) over that twice now. I know I am missing it, or maybe not, its a long read. But I can’t find where it specifically states the distribtuions from an annuitized IRA are not applicable for RMD amounts on any other contract/account.
I looked this over twice, can someone let me know what I am missing?
Thanks in advance
Permalink Submitted by Alan Spross on Mon, 2011-03-28 21:57
I don’t think you are missing anything. The IRS Reg along with the 2004 IRS Release on RMDs from DB plans and annuities leaves much to be desired. The entire release seems to be preoccupied with the tables and assumptions to make sure the distribution is large enough, while ignoring the obvious relation to other IRA accounts, the timing of distributions from each and some rollover related issues when the RMD amount is not clear.
The conclusion you mentioned is the consensus of several IRA experts based on the lack of an account balance following annuitization. It is also generally believed that in the year the annuitization is done, both IRA accounts did have prior 12/31 balances and in that first year only, the distributions can be aggregated to meet the RMD calculated using actual prior balances.
Here is an article by Natalie Choate that touches on many of these unresolved issues:
http://advisor.morningstar.com/articles/fcarticle.asp?s=&docId=21248&fro…