Aggregation Questions

Submitted by Sidney Poretsky on Sat, 2019-12-28 20:26

Two aggregation questions:

1. Can an IRA and a Roth IRA, both inherited by an individual at the same time from the same decedent, be aggregated so that the total RMD can be taken from the IRA?

2. A 403b annuity is in process of being transferred to an IRA annuity with another company. The owner is 71 has taken her 2019 RMD from the 403b, as well as from an existing IRA account. The objective is to aggregate the IRA’s. However, the transfer has been delayed and will not take place until the beginning of 2020. Can the RMD for both accounts be taken from the existing IRA? Or does the 2020 RMD have to be taken from the 403b BEFORE the transfer takes place?

Your response on this will be most appreciated.

nofrills



Submitted by Alan - IRA critic on Sat, 2019-12-28 22:06

  1. No, the RMD for different IRA types must be satisfied separately per IRS Reg 1.408, QA 9.
  2.  403b RMD compliance is difficult due to the aggregation of 403b accounts for RMDs. The plan will usually assume the current RMD has not been distributed unless the participant certifies that it has, and therefore the 403b RMD for 2020 should be distributed prior to the direct rollover. The added IRA balance from the direct rollover would not generate an IRA RMD until 2021. 

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