RMD Amount

Submitted by Roger Gaudette on Sat, 2020-01-11 18:43

My broker recommended an RMD for 2019. Can I reduced that amount proportionately according to the percentage of after-tax contributions in my IRA or is that issue dealt with in the income tax calculation?



Submitted by Alan - IRA critic on Sat, 2020-01-11 19:17

  • Your RMD amount is always a gross amount, and thereby ignores the % of basis in your IRA. Once issued, the taxable/non taxable portions are calculated on Form 8606, but the actual amounts cannot be calculated until 12/31/2020 since they are based on the year end value of all your non Roth IRAs. So while the gross amount of your RMD is based on the PRIOR year end gross value, the taxable portion is based on the CURRENT year end gross value. Therefore, the income tax calculation will determine your taxable income for the RMD reported on Form 1099R by your custodian.
  • What year did you reach 70.5 to the day?  If 2019 was your first RMD distribution year, then you are allowed to defer that RMD to 4/1/2020.  If you were NOT YET 70.5 at the end of 2019, then your first RMD year is extended either 1 or 2 years by the Secure Act. More specifics can be provided if you advise when you reached 70.5.

Submitted by Roger Gaudette on Sun, 2020-01-19 14:38

Thanks much!  I’ll have to withdraw the remainder of the RMD before 4/1/2020. The majority was taken in 2019.

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