RMD from Solo Profit Sharing plan

Bill is the sole owner of his company and participant in his company profit sharing plan. He needs to take an RMD in 2019 and would like to do the distribution by moving equity positions into his non qualified brokerage account. Is there any stipulation against doing that in an employer plan like this? Also, would taxes need to be withheld from the RMD (of course, they would be in cash) or can he pay those later or out of pocket?
We have done this with IRA’s, but typically a distribution from a 401k or other Employer plan has been done in cash. Thank You



An in kind distribution from a 401k can be done to satisfy an RMD in the same manner as an IRA. There should be no mandatory withholding since RMDs are not eligible for rollover, but perhaps the participant would want to consider optional cash withholding to address the tax liability.

  • As Alan pointed out, there is no IRS restriction on an in-kind RMD, but there may be restrictions involving one or more parties involved in administering the plan. Many retirement plans with eligible non-spouse employees will only do cash and not in-kind RMDs.
  • However, it is more common among one-participant plans. This is a question for your one-participant PS plan provider(s).

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