RMD from solo 401(k)

For years client was self-employed and contributed to a solo 401(k) plan. Let’s say balance at end of 2014 was $100,000. Client turning 70-1/2 this year (2015). Earlier in 2015 client rolled the entire solo 401(k) balance into an existing rollover IRA without taking the 2015 RMD. Can the client now take the RMD for both the solo 401(k) and the rollover IRA from the IRA this year? Or must he roll enough back into the 401(k) to take the 401(k) RMD out of the 401(k) account?
Thank you in advance for your assistance,
Art Dicker



Art, while the RMD should have been withdrawn before the IRA rollover, the distribution for the IRA rollover is deemed to satisfy the 401k RMD. However, since the RMD was rolled over it is considered an excess IRA contribution in the amount of the RMD. It must be withdrawn from the IRA as a corrective distribution of an excess IRA contribution. Any earnings will be taxable. This will not cost the client much, however it does make filing his tax return more difficult. Client can only show a rollover on line 16 of Form 1040 of the amount in excess of the RMD. The RMD amount will be taxable on line 16b. Then any earnings from the IRA corrective distribution will be reported on line 15 of Form 1040 along with the IRA RMD.



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