RMD from 401k
Client normally took RMD from 401k in December. Changed 401k Plan providers in December. Currently in Blackout Period. If not able to take from 401k for 2014, could client take more from IRA to satisfy RMD?
Client normally took RMD from 401k in December. Changed 401k Plan providers in December. Currently in Blackout Period. If not able to take from 401k for 2014, could client take more from IRA to satisfy RMD?
Permalink Submitted by Alan - IRA critic on Mon, 2014-12-22 20:05
No. Each individual 401k plan must separately satisfy RMD requirements. Since the blackout is a plan decision or required by law, the IRS will almost surely waive the penalty for failing to take the RMD on time. Nonetheless, the client should specifically contact the plan to make sure that the plan position is that RMD requirements are not exceptions to the blackout. While the IRS is likely to grant the penalty waiver requested on Form 5329, I do not know of any solution to the tax effects of having two RMDs taken next year. That wil likely produce a higher total tax bill, and the IRS is not likely to allow the individual to take the 2014 distribution in 2015 while reporting it on the 2014 return.