MRD WHICH INLCUDES NUA

I have a situation which I am being told a beneficiary needs to take a 2007 MRD from an inherited 401k. [ the decendent passed away in 2006] We will be rolling over the pretax portion of the account. We are being told that the MRD will include the value of employer securities . These securities will then be distributed into a non-qualified brokerage account to preserve the NUA.

My question is twofold.

1 Does the the portion of thr MRD which relates to value of the employer securities give us additional cost basis in the stock.

2. Does the MRD taint the NUA The total account will be dsitributed by year end?

AD



The total between the cost basis and the NUA is typically more than enough to satisfy the RMD. Therefore at this late date, I would take care of the company stock distribution first, and then be sure to transfer the other assets to an IRA prior to year end. It is critical that there be no trailing dividends or any other plan assets that do not get transferred prior to year end or the LSD requirements will not be met.

The cost basis and NUA per share is not affected in any way by the RMD.



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