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Investors & landlords
Are these dividends received under section 404(k) from employer stock in an employee stock ownership (ESOP) plan, paid directly to you in cash and reported with code U on Form 1099-R? If so, these do not satisfy any part of your RMD from the employer plan. They only count as part of your RMD if they are paid to your employer plan, are reinvested in employer stock and become part of the plan balance to your credit, and you subsequently receive a regular distribution from the plan reported with code 7 on the Form 1099-R.
See section 1.401(9)-5 Q&A-9(b)(5): https://www.law.cornell.edu/cfr/text/26/1.401(a)(9)-5
‎June 5, 2019
2:57 PM
9,057 Views