Minimum Required Distributions
My wife turned 70 1/2 years old in mid-December, 2019, so she was subject to take her first MRD by 12/31/2019. Since it was her first MRD, we decided to defer taking this first MRD until 4/1/2020.
Now, since the Gov’t has postponed the filing of 2019 taxes, is there a postponement for this first MRD?
Thank you, Dr. John
Permalink Submitted by Alan - IRA critic on Thu, 2020-03-26 16:53
Edited from earlier: The preliminary wording of the stimulus bill does allow for 2019 RMDs that were not distributed prior to 2020 to be waived if the RBD was 4/1/2020. Accordingly, while this is not yet official, I suggest waiting for the law to be signed and analyzed before taking the 2019 RMD. If the preliminary provisions are changed, the RMD can be taken late and a 5329 filed to request the penalty waiver with 2020 taxes. This is easier that rushing to complete that RMD now then having to roll it back within 60 days.
Permalink Submitted by JOHN Chino on Sat, 2020-03-28 13:30
From reading the new Postings on your web-site, it sounds like the requirement for taking the first RMD (due to be taken 4/1/2020) has been delayed – is that correct?
Permalink Submitted by Alan - IRA critic on Sat, 2020-03-28 14:18
Not delayed, it has been waived and so has the 2020 RMD. Therefore, they are relieved of 2 years of RMDs.
Permalink Submitted by Roger Kirschenbaum on Sat, 2020-03-28 15:21
Does the RMD waiver apply to inherited IRAs? In particular if RMDs have begun in prior years.
Permalink Submitted by Alan - IRA critic on Sat, 2020-03-28 16:16
Yes, the waiver does apply to inherited IRA RMDs for 2020. When RMDs resume in 2021, the divisor will be the 2019 divisor reduced by 2.0. However, if the new tables are introduced for 2021, the 2021 divisor will have to be reset to the new tables before determining the actual 2021 divisor. If you already took the 2020 inherited IRA RMD, there is no way to roll it back.
Permalink Submitted by Richard Stebbins on Sat, 2020-03-28 21:27
Normally you cannot roll over an RMD that has been taken. However I noticed comments by Ed on CNBC that indicated in this case since RMD’s have been eliminated for 2020, an RMD taken earlier (is no longer really an RMD) can be rolled over as long as you are within the 60 day rollover rules. Just want to verify everyone agrees with this. Thanks
Permalink Submitted by Alan - IRA critic on Sat, 2020-03-28 21:56
Yes, that is correct. In fact, if you end up qualifying for a corona virus related distribution (up to 100k), you can roll back the distribution you took in 2020 more than 60 days ago, and you have 3 years to do that.