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Old 12-02-2014, 11:04 PM   #21
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Originally Posted by papadad111 View Post
Following this. My mom has a few small IRA's and has reached RMD age. Need to make minimum withdraws I assume... How is this handled when funds inside Ira are in annuities ?
I have no idea how annuities are handled when within an IRA.
However, I wanted to emphasize your mom must take RMD (if they apply) because failure to take RMD is tax bill of 50% of what should have been taken, plus you still have to take it out (and be taxed again on the withdrawl).
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Old 12-02-2014, 11:13 PM   #22
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Here is Alan S.' response: Fairmark Forum :: Retirement Savings and Benefits :: Wash Sale Taxable Account & IRA

Re: Wash Sale Taxable Account & IRA
Posted by: Alan S., December 3, 2014 03:08AM
Kaneohe, selling in an IRA does not create a wash sale because there are no capital losses in an IRA that the IRA owner can claim. Custodians who track gains or losses on individual investments in an IRA are just offering that to help the IRA owner determine investment results.

Alan S. posts on the fairmark.com, bogleheads.org, and irahelp.com sites.
It is interesting to me that zillions of us who know much less than he does can come to the same conclusion that he knows more than us and that he is correct even though we know so little.
Thanks for that reference!
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Old 12-03-2014, 05:19 AM   #23
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It happened to us (getting RMD distro's we didn't ask for and didn't want). We are the only couple we know who have both an RMD'er and an age-different spouse, so again, I can only speak from personal experience.

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ymmv, I suppose, but my experience is just the opposite.......they all mail informational material so that you can't yell at them and say you didn't know but the default seems to be if we don't hear from you, we aren't doing anything. .
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Old 12-03-2014, 07:05 AM   #24
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I have no idea how annuities are handled when within an IRA.
However, I wanted to emphasize your mom must take RMD (if they apply) because failure to take RMD is tax bill of 50% of what should have been taken, plus you still have to take it out (and be taxed again on the withdrawl).
When I researched SPIAs years ago I remember finding that some IRS rule allows annuitizing to count for RMDs for the amount converted to an annuity. The annuity payment is taxable income just like an IRA withdrawal. You will need to find the rule yourself, consult an accountant, or probably just check through the IRA custodian. Trusting my memory would be foolish.
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Old 12-03-2014, 07:12 AM   #25
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It happened to us (getting RMD distro's we didn't ask for and didn't want). We are the only couple we know who have both an RMD'er and an age-different spouse, so again, I can only speak from personal experience.

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Old 12-03-2014, 08:22 AM   #26
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When I researched SPIAs years ago I remember finding that some IRS rule allows annuitizing to count for RMDs for the amount converted to an annuity. The annuity payment is taxable income just like an IRA withdrawal. You will need to find the rule yourself, consult an accountant, or probably just check through the IRA custodian. Trusting my memory would be foolish.
Yes, I think the annuitization, which relies on its own life-expectancy formula for depletion, satisfies the IRS RMD requirements even if the amount/schedule is different. So as long as it's the only IRA she owns, the IRA custodian should know what to do.
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Old 12-03-2014, 09:36 PM   #27
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Also note that the rules for inherited IRAs are significantly different. There have been a number of threads on this recently so search for them if you're in that situation.


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Old 12-03-2014, 09:57 PM   #28
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Also, if the IRA's are with different financial institutions, you need to instruct ALL the institutions in writing: "Do NOT distribute; I am taking my RMD from another institution" + "Please send my 2014 RMD in the amount of $XXXX. Please withhold XX% for Federal and XX% for State/Local income tax."

If you don't instruct, they will all send you checks based on a presumed allocation, and you don't want that because you will incur taxes on every single check!

Amethyst
I'm not experiencing what you said above at all.

I have IRAs at Schwab, Vanguard and PenFed and a Solo 401K at Vanguard. The three institutions notified me that I could take a RMD from them based on the 12/31 balance. I elected to aggregate the IRA amounts and take the distribution from the PenFed account only, which I did.

I did not notify Schwab or Vanguard that I intended to pull the whole amount from another institution and never received any unauthorized distributions from either Schwab or Vanguard.

The Solo 401K RMD must be taken separately which I did.

Whatever happened to you is not the normal case. I don't believe the institutions holding your IRA accounts automatically send you a RMD unless you agree to it and schedule it with them.
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Old 12-03-2014, 11:29 PM   #29
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Everyone thanks for your responses! This discussion has been very productive. Keep the comments coming....


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