BASIS FOR CALCULATION OF RMD?

[billstich]

FAIR MARKET VALUE AT BEGINNING OF TAX YEAR OR END OF TAX YEAR?

[RichardG]

Figure your required minimum distribution for each year by dividing the IRA account balance (defined next) as of the close of business on December 31 of the preceding year.  The IRA account balance is the amount in the IRA at the end of the year preceding the year for which the required minimum distribution is being figured.  

If you're taking your first RMD in 2017, in some cases you use the account balance at the end of 2015.  The IRS gives this example:

Laura was born on October 1, 1945. She reaches age 70½ in 2016. Her required beginning date is April 1, 2017. As of December 31, 2015, her IRA account balance was $26,500. No rollover or recharacterization amounts were outstanding. Using Table III in Appendix B, the applicable distribution period for someone her age (71) is 26.5 years. Her required minimum distribution for 2016 is $1,000 ($26,500 ÷ 26.5). That amount is distributed to her on April 1, 2017.