Taking 1st & 2nd RMD in same year | Ed Slott and Company, LLC

Taking 1st & 2nd RMD in same year

I have sought answers to my questions by reading IRS pub. 590B, which is unclear.

Please provide answers to the following RMD questions:

2017 RMD: Turned 70.5 yrs. old in 2017. First RMD due by Dec. 31, 2017 or April 1, 2018. I have deferred first RMD to on or before April 1, 2018.

Please confirm that 2017 RMD taken in 2018 will use IRA/SEP-IRA totals from 2016 year end statement?

Please confirm following: 2016 IRA/SEP-IRA year end statement total value = $XXX,XXX.XX divided by 26.5 life expectancy factor = $XX,XXX.XX RMD amount to be taken for 2017 in 2018. I will round up to next whole dollar to be safe. Please confirm this is correct.

2018 RMD: 2018 second RMD due by Dec. 31, 2018 & will use 2017 IRA/SEP-IRA year end statement total value. 2017 year end statement total value INCLUDES 2017 RMD value of $XX,XXX.XX which will be taken on or before April 1, 2018.

Please confirm following: If 2017 IRA/SEP-IRA year end statement total value = $ XXX,XXX.XX, I must subtract value of first RMD taken on or before April 1, 2018, in order to determine ADJUSTED total value of 2017 year end statement.

$XXX,XXX.XX minus $XX,XXX.XX = $XXX,XXX.XX adjusted value of 2017 IRA/SEP-IRA year end statement to be used to calculate 2018 RMD taken on or before Dec. 31,2018?

Turned 71 years old on Dec. 14, 2017. Since I am taking two RMD's in 2018, does the second RMD use life expectancy factor of 26.5 for age 71 or 25.6 for age 72? I will turn 72 on Dec. 14, 2018.

Does it make a difference if second RMD is taken before or after my birthday in 2018, regarding selection of life expectancy factor?

Please confirm that I will pay taxes for 2017 RMD taken on or before April 1, 2018 & 2018 RMD taken on or before Dec. 31, 2018, when I file my 2018 tax return?

Thanks,

Conservtek

  1. Yes, deferred 2017 RMD is still calculated using 12/31/2016 balance.
  2. The 26.5 divisor for 2017 RMD is correct because you turned 71 by 12/31/2017. 
  3. You are correct that the 2018 RMD is figured from the actual 12/31/2017 balance.
  4. No adjustment is made to the year end 2017 balance for not having taken the 2017 RMD in 2017. An adjustment used to apply, but was eliminated in 2002.
  5. The 2018 RMD (due by 12/31/2018) will be figured with a divisor of 25.6 since you will be 72 in 2018. It does not make a difference when you actually distribute your 2018 RMD with respect to the divisor.
  6. Yes, you pay taxes on all distributions in the year distributed per the (2018) 1099R reporting the distributions. The 1099R forms look the same for all IRA Distributions, whether RMDs or not. They do not indicate the amount of the RMDs or the year they are for, and you do not need to break them out on your tax return.
 

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