Wednesday, November 7, 2018
Seymour Goldberg recently published an Article entitled, Dealing with RMD Shortfalls, Ed Slott's IRA Advisor Newsletter (November 2018). Provided below is the introduction to the Article.
The basic required minimum distribution (RMD) rules are well known, by advisors and by many clients. IRA owners must take RMDs once they reach their required beginning date, as per an IRS table, or face a 50% penalty for any shortfall.
That said, many IRA owners in that category fail to take RMDs, or any distributions at all. This might go on for many years, leaving a huge potential tax obligation for the IRA owner, a beneficiary, a trustee, or even an executor.
What should an advisor keep in mind, when faced with RMD noncompliance? Tax professionals must comply with specific rules; advisors who are not tax pros may face difficult decisions.