IRA RMDs
I have an individual trying to satisfy his RMDs for calendar year on personally owned IRAs by taking total amount of RMDs for the personally owned IRAs from a beneficiary IRA he inherited from his son. For example, RMDs from his IRAs for 2014 $40,000 total. He thinks if he just withdraws the $40,000 from the beneficiary IRA then he has met that requirement. I say no. I know you can take total of RMDs from multiple IRAs from any one single individually owned IRA. But I don’t think you can pull from the bene IRA to meet that requirement. Correct or no? Tks.
Permalink Submitted by Alan - IRA critic on Tue, 2014-05-13 17:15
You are correct, and this individual is setting himself up for a 50% penalty on the RMD shortfall from his own IRAs. Worse yet, the extra distributions from the inherited IRA cannot be rolled over. He can probably make up the RMD shortfall on the owned accounts by immediately distributing any delinquent RMD and requesting a penalty waiver on Form 5329. The penalty would probably be waived, but there is no fix for the additional taxation of the extra amount taken from the inherited IRA, and the loss of tax deferral.
Permalink Submitted by Jody Howard on Tue, 2014-05-13 17:55
Thanks.