Early Withdrawal

Archive for August, 2011

Question: Deadline for inherited IRA required minimum distribution – was it Dec. 31, 2010?

If a nonspouse inherited an IRA several years ago and took RMDs on schedule but did not withdraw an RMD for 2010 before December 31, 2010, does that constitute a failure to withdraw for the year, triggering the 50% penalty? Or can the inheritor still make the withdrawal for 2010 before April 18, 2011? Inheritor was born after decedent, decedent was well over 70 1/2 at time of death, initial RMD was taken properly and inherited IRA is traditional, not Roth, if any of that makes a difference. Thanks.

Answer: Yes, the deadline for RMDs in any given calendar year is Dec 31. And, failure to satisfy said RMD is 50% of the shortfall. That said, you can still request a waiver of this excise tax. Here’s a link to an explanation you might find helpful.

Good luck!

http://www.ehow.com/how_2165537_irs-penalty-late-rmd-distributions.html

PS – it may be wise to put your RMD on auto-pilot with the IRA custodian so this can’t happen again. It’s a simple form.

IRAKLIS OLYMPIAKOS 2-1 TO PENALTY