NUA and RMD
401(k) participant died in 2015
non-spouse beneficiary (sole primary beneficiary) in 2016 – moved company stock via NUA transaction to a brokerage account – followed by – an IRA rollover (of all the remaining non company stock assets)
non-spouse beneficiary was (in order to “stretch”) subject to an RMD prior to rollover
Question(s)
I am unsure of the outcome of this fact pattern since the NUA transaction occurred first -my understanding is the first dollars distributed are deemed satisfying the RMD –
Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2016-10-24 17:29
Sounds like a proper lump sum distribution was done and the 401k no longer has a balance. The value of the shares transferred to the brokerage will count toward the beneficiary RMD for 2016 from the 401k, so this was done in the right order. The 401k RMD was completed by the shares, so the entire remaining balance was available to be rolled to the inherited IRA. If there was any after tax contributions in the inherited plan, that amount is normally applied to reduce the taxable cost basis for the NUA shares.