in Education
The reason I don't want to take it right now is because my IRA is invested in a single stock that has lost 90% of its value over the past 2 yrs ... I am hoping to hold the stock until it rises again enough to get back some of all of my original investment... taking the RMD of $2,756 right now would cost me $23,476 in lost capital ... of course I may NEVER get back my original capital, but the stock has a tendency to RISE every April ... so maybe it is better to "eat" the 50% penalty right now and hopefully in April 2017 take the 2016 RMD at a lesser loss of capital? And then try to explain to the IRS why the distribution was late?
You'll need to sign in or create an account to connect with an expert.
To avoid the 50% excess accumulation penalty, you must make the distribution by December 31, 2016. Intentionally delaying the distribution beyond year-end would not constitute reasonable cause for the IRS to waive the penalty.
You do have the option to simply not take the RMD and to pay the $1,378 penalty.
You could take the distribution as an in-kind distribution, but your cost basis would become the value on the date of distribution and the rebound would be taxed as a capital gain when realized.
If you have multiple traditional IRA accounts, you can satisfy this RMD with a distribution from the other traditional IRA account.
To avoid RMDs going forward and to minimize taxes, you should probably consider converting the traditional IRA to a Roth IRA while the value is temporarily down.
To avoid the 50% excess accumulation penalty, you must make the distribution by December 31, 2016. Intentionally delaying the distribution beyond year-end would not constitute reasonable cause for the IRS to waive the penalty.
You do have the option to simply not take the RMD and to pay the $1,378 penalty.
You could take the distribution as an in-kind distribution, but your cost basis would become the value on the date of distribution and the rebound would be taxed as a capital gain when realized.
If you have multiple traditional IRA accounts, you can satisfy this RMD with a distribution from the other traditional IRA account.
To avoid RMDs going forward and to minimize taxes, you should probably consider converting the traditional IRA to a Roth IRA while the value is temporarily down.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
mdktech24
Level 3
in Education
kbfee
New Member
jhollon58
New Member
RTI25
New Member
chronicle410
New Member