First Year RMDs from Two IRAs – RMDs in Different Tax Years
Client is age 70 1/2 this year and has two different IRAs. Clearly the accounts can be aggregated for the purpose of calculating the RMD. In addition, the total RMD can be taken from just one IRA if so desired.
What about taking the RMD withdrawal from each IRA in different years? More specifically, is it allowable to treat IRA #1 and IRA #2 separate for the purpose of the initial RMD withdrawal? Client has the option of taking the first year RMD by the end of the year or by April 1 of the following year. What if it makes sense from a tax planning standpoint to take the RMD from IRA #1 this year but wait until April 1 of next year to take the RMD from IRA #2. This is allowable under the IRS code?
Permalink Submitted by Alan - IRA critic on Fri, 2019-03-08 18:43
Yes, that is allowable within the IRA RMD aggregation rules. The IRS will look at the total RMD for both accounts and expect that to be completed by 4/1 of the following year. Whatever is distributed in the current year reduces the amount that must be withdrawn regardless of IRA account by 4/1 of the following year. Then the following year RMD must be completed by 12/31 of that year, again split between the two IRA accounts in any manner desired.