RMD turning 70 1/2 and 71 in the same year

Submitted by Pamela Prine on Tue, 2019-02-19 16:11

Clients birthday is August 5, 2018. He turns 70 1/2 in February 2019. My understanding is he has until April 2020 to take his first RMD. Because he turns 71 in August of 2019 – does he have to take an RMD using his 12-31-2018 balance by December 31, 2019?????

Does the 70 1/2 RMD count for his age71 RMD???

OR it sounds to me like he can take his 70 1/2 RMD by April 2020 and then take his age 72 RMD by December 31, 2020. So two in 2020.

What year end does he calculate his 70 1/2 RMD? 2018 or 2019.

The Schwab calculator indicates this:

Birthday: August 5, 1948

70th Birthdate: August, 5, 2018

70 1/2 Birthdate: February 5, 2019
1st RMD due: April 1, 2020.

RMD due December 31, 2020

-You must take your first RMD by April 1 of the calendar year AFTER you turn 70 1/2.
-Therefor, you must take your RMDs by December 31.

Pam Prine

FYI, we are excited to be attending the event in Vegas this weekend. Will be registering today.

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Permalink Submitted by Alan - IRA critic on Tue, 2019-02-19 16:21

The Schwab calculator is correct. The 2019 RMD must be completed by 4/1/2020 at the latest, and the 2020 RMD must be completed by 12/31/2020. RMDs are taxable in the year in which they are distributed.
The 2019 RMD is based on the 12/31/2018 balance and age 71, so the divisor is 26.5.
The 2020 RMD is based on the actual 12/31/2019 balance which is not adjusted if the 2019 RMD is deferred until 2020. The Uniform table age is 72, so divisor is 25.6.
The first RMD distribution year in which taxpayer reaches 70.5 will have a divisor of 27.4 if taxpayer does not reach age 71 by year end. This client will be 71 so his first divisor is 26.5.