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RMD

RMD WAIVER AND ROTH CONVERSION RECHRACTERIZATIONS: TODAY’S SLOTT REPORT MAILBAG

Question: Good Morning, We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year? Thank you, Linda

QCDs and RMDs Under the CARES Act: Today's Slott Report Mailbag

Question: Is there any problem with someone who is self-employed and has an active SEP making a deductible SEP contribution and an IRA QCD after age 70 1/2? In this case, the QCD would come from the IRA while the SEP continues to be funded. Does any offset apply? Bill Answer: Hi Bill, This is an interesting question!

IRS Issues New RMD Tables . . . for 2022!

Good news! You can look forward to somewhat smaller required minimum distributions (RMDs) from your IRA and company retirement savings plan beginning in 2022. That’s because, on November 6, the IRS released new life expectancy tables that are used to calculate RMDs. The new tables are not effective until 2022. RMDs are waived for 2020, and RMDs for 2021 will be calculated under the current tables.

RMDs Under the CARES Act: Today's Slott Report Mailbag

Great work you all do. Been a reader of Ed for a long time. How would this scenario work? New client of mine's husband passed away in 2019 and he had not taken his RMD. The plan was to transfer the account to my firm and take the RMD when it got to my firm as there was plenty of time. However, the insurance company kept rejecting the transfer paperwork (as they did not tell the client everything they needed to submit).

RMDs and CRDs under the CARES Act: Today's Slott Report Mailbag

Question: An 85-year-old died in 2020 and left his IRA to his 53-year-old son. Father did not take 2020 $107,000 RMD. Does the son have to take it? Does the son have to take anything in first 9 years, including this RMD? Thank you. Answer: The CARES Act waived RMDs for IRAs in 2020. Even if an IRA owner dies in 2020, his year-of-death RMD still falls under the waiver. So, the $107,000 did not need to be withdrawn by the father, and it does not need to be withdrawn by his son beneficiary.

RMDs Under the Secure Act & Roth Conversions: Today's Slott Report Mailbag

Question: Would you kindly clarify the rule that governs the withdrawal period and the tax implication (if any) of RMDs from an inherited IRA? The SECURE Act and the IRS document 590B are not clear. Here is the situation: I have a traditional IRA with my granddaughter as the sole beneficiary. My understanding is that before the SECURE Act, inherited IRA's had to issue annual RMD's if the original owner was taking them. The SECURE Act seems to say that annual RMD's are no longer required to be taken by a non-spouse beneficiary, just as long as the account is fully distributed in the 10-year period.

Perils of the 60-Day Rollover

As sure as the sun will rise, someone will take a distribution from his IRA tomorrow. And as sure as the moon will set, someone will fail to roll over his IRA distribution within 60 days. And as sure as the wind will blow, so too will the icy gusts from the IRS as penalties and taxes accumulate like a snowdrift upon said distribution when the 60-day rollover deadline is missed. Yes, a person is permitted to take a distribution from his IRA and roll it over to another (or the same) IRA within 60-days. But only one rollover is allowed within a 12-month period. That means no rollovers for the next 365 days.

Unwanted RMDs and Using IRAs for Higher Education: Today's Slott Report Mailbag

Question: I had taken an RMD in January 2020 from an IRA account. Then in July, I returned a portion back to the same IRA. Now I want to return another portion back to the IRA. Are multiple transactions for reversal allowed? Thanks for your quick reply in advance. Piyush Answer: Hi Piyush, You are allowed to pay back an IRA distribution with multiple partial rollovers.

RELIEF BEYOND AUGUST 31 FOR RMD REPAYMENTS

Some of you may have received an RMD (required minimum distribution) from an IRA or employer plan earlier this year that you don’t want to keep. Since the CARES Act waived RMDs for 2020, “RMDs” received in 2020 are technically not RMDs and are eligible for rollover. The IRS has relaxed the usual 60-day rollover rule if an RMD is repaid by August 31. (The IRS also waived the once-per-year rollover rule for an IRA RMD that is repaid back to the same IRA before August 31.) With just a few days to go, you may not be able to time to meet the August 31 deadline. But all may not be lost.

Plans Can Still Pay Out 2020 RMDs, but Employees Don’t Have to Treat Them That Way

Many of you may have already received, or may be receiving, an RMD (required minimum distribution) from your employer plan this year. If the CARES Act waived 2020 RMDs from plans and IRAs this year, how could a company plan be making RMD payments? The answer is a little complicated. Under the tax code, plans are allowed to force participants to receive a distribution without their consent at a certain age. For most plans, that is age 65. The CARES Act did not change that rule. So, plans are legally permitted to pay out RMDs at age 70 ½ or later – even in 2020. Plans may be continuing to pay RMDs to avoid modifying their procedures for processing distributions just for this year.

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