If RMD check has been written to, but not physically received by, account holder by 12/31 of required year, is it safe from IRS
Regarding taking RMDs from Traditional IRAs, as long as a check has been written to the account holder by Custodian by 12/31 of the required year, even if it’s not cashed or even actually received in the mail until the beginning of the next year, is it still safe from IRS penalty, or must it actually be physically received and or cashed by the account holder to avoid penalty?
Permalink Submitted by Jose Morales on Thu, 2016-12-08 23:33
as long as it is issued by end of business 12/31 the IRA owner has fulfilled their mandatory distribution requirement.
Permalink Submitted by Cheryl Van Beek on Fri, 2016-12-09 02:07
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2016-12-08 23:57
The IRS will go by the 1099R. If the custodian mailed the check by 12/31 it should be reported on the 1099R. If the check was lost and a stop payment done by the custodian, there could be a problem because the custodian might amend the 1099R and re issue one for the following year. As long as there is no stop payment issued on the check there is no time limit to cash it.
Permalink Submitted by Cheryl Van Beek on Fri, 2016-12-09 02:08
Thanks for all your help!