Trustee-to-Trustee Transfers
In the March 2013 workbook on Pg 33 it reads as follows: If a transfer is made from one IRA to another via a trustee-to- trustee transfer, and the IRA owner is subject to required distributions, the required distribution does not have to be withdrawn from the amount transferred.This is yet another reason to use the trustee-to-trustee transfer as opposed to a rollover where you receive a check and redeposit those funds into an IRA within 60 days.
Does this mean that if an individual transferrs 100% of his IRA (eg. $100K which would have had a $6,100 RMD) he will escape the RMD on that IRA completely for the tax year of the transfer even if he has other IRA’s from which he could have taken the $6,100 RMD?
Permalink Submitted by Jose Morales on Thu, 2013-04-04 15:59
No, it does not allow the individual to escape the RMD for the year. All it is stating is that the RMD does not have to be taken prior to completing a Trustee to Trustee transfer. You must only take your RMD prior to a rollover. This change was part of the Economic Growth and Tax Reconciliation Act of 2001. Pior to this the RMD had to be competed before either a Rollover or a Transfer.