Is renewing a CD a “distribution”?
Hi,
I will turn 70-1/2 during 2012. I plan to take my first RMD during 2012. I have a number of TIRAs at financial institutions with the funds invested in CDs.
I have some TIRA CDs that will mature in January 2012.
I believe I have learned from this forum that the first distribution taken during a year must go to the RMD.
I also believe I have learned that if one does a direct transfer of the CD proceeds from one financial institution to another, that is considered a distribution.
Am I correct so far?
If I renew a maturing CD at the same financial institution, does that also constitute a distribution?
Thanks.
Permalink Submitted by Peter Lingane on Fri, 2011-11-25 03:52
You can transfer money from one IRA to another irrespective of whether you have taken your required distribution. Therefore there is no RMD requirement before renewing a CD within a traditional IRA at the same institution nor before transferring the maturing CD to another institution.
If the IRA custodian writes you a check when the CD matures, you are permitted to rollover within sixty days only that portion of the check which is in excess of your required distribution.
In contrast, you must take your required distribution before you can transfer money from an employer plan to another employer plan or IRA.
See also Alan’s comment of September 18.
Permalink Submitted by Genevieve Comfort on Sat, 2011-11-26 01:28
Peter,
Thanks very much. I have also reviewed the Sept 18 entry from Alan. I think I now understand. Thank you both.
gary