RMD
Client just informed me of an IRA at her local bank that she has not taken RMD’s from for the past 8 years. She holds one stock and take the dividends in cash. Does the dividends paid to her in cash count towards her RMD?
Client just informed me of an IRA at her local bank that she has not taken RMD’s from for the past 8 years. She holds one stock and take the dividends in cash. Does the dividends paid to her in cash count towards her RMD?
Permalink Submitted by Alan Spross on Tue, 2012-08-21 20:13
Yes, the distribution of dividends should produce a 1099R each year. It will have to be a high yielding stock for the dividends to be enough to satisfy the full RMD amounts. Of course, if she has other TIRA accounts elsewhere, she can use the other IRAs to satisfy her total RMD, but if prior RMDs have been insufficient, she should make up the shortfall and file Form 5329 requesting a penalty waiver.