RMD Question

Submitted by Dianne Corsbie on Thu, 2020-04-30 00:58

Client changed IRA custodian on 12/28/2019. The resigning custodian mailed the check to new custodian. Check arrived 1/6/2020. Both custodians do not have a value at 12/31/2019 for 2020 RMD calculations.

Spoke to resigning custodian and they will not be submitting Form 5498 as the value at 12/31/2019 was $0
Receiving custodian’s account was not established until 1/6/2020
The funds were in transit on 12/31/2019

1. Can client skip 2020 RMD as there will be no reporting Form 5498
2. If not, what is used to do the calculation

Thanks in advance
Dianne



Submitted by David Mertz on Thu, 2020-04-30 01:29

  • The CARES Act has waived all RMDs for 2020, so the client can skip what would otherwise have been the 2020 RMD.
  • The situation you described is called an “outstanding rollover” (even if it was a trustee-to-trustee transfer and not actually a distribution and rollover).  Had RMDs not been waived for 2020, the amount that was moved to the receiving IRA would have been required to be added to the 2019 year-end balance ($0 in this case) of the receiving IRA when determining the RMD for that IRA for 2020, so an RMD would have been required for the new IRA.

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