Thank you for the reply. Your suggestion does not make sense.
Box 1 is the total distribution. This is not the RMD required for the account.
Box 1 includes ALL distributions, not just RMD:
-Distributions that would apply to the RMD, and are not put into a retirement account.
-Distributions that are above the RMD level and are not put into a retirement account
-Distributions for Roth Conversions
-Distributions that are moved to another IRA.
For example, if I take a distribution which is for RMD of $5,000, that will be put into box 1.
Then if I do a Roth Conversion of $50,000, that will also go into box 1.
Then if I move the remainder of say $200,000 to a new custodian, that will also go into box 1.
So in this case Box 1 is $255,000. equal to my entire IRA value. This is not the correct answer for the RMD required or the RMD distributed, or any other RMD related question.
Lets say I am 73 years old, my IRS lifetime is 26.5 years, and my RMD required is $255000/ 26.5 = $9623 for this account. I withdrew $5000 for RMD. all other distributions for this account went into something else. It makes no sense to put in $255,000 for the required RMD.
Following your advice from many posts:
- RMD required for this account is $9623
-RMD taken from this account is $5000
So for this account there is a $4623 shortfall. If this is my only IRA, I would owe a 25% penalty,
However, I am a savy taxpayer so I take $4623 as an RMD distribution from another traditional IRA. Now I have taken the full RMD value and there should be no penalty. However Turbo Tax STILL applies the penalty anyway.
Thank You again for the reply. Please let me know how to reconcile this.
