IRA Annuity RMDs

Forum|Forum|3 years ago
February 5, 2023
5 replies
58 views

I have an annuity in an IRA with fixed monthly payments. Can I use part of the distribution from the annuity to cover RMDs in my other IRAs.

Best answer by dmertz

Except for the year when payouts begin, DanaB27's answer is incorrect with respect to IRA annuities in the payout phase. For the years after the IRA annuity begins the payout phase, the distributions from the IRA annuity are considered to be all RMD of the annuity and the entire RMD required of the annuity. For the years after the year the payout phase begins, the distributions from the IRA annuity are not permitted to be used to cover the RMD for any other of your traditional IRAs.

DanaB27

Employee Tax Expert

Yes, you can take your RMD from only one IRA account if you have multiple IRAs.

"If you have more than one IRA, you must calculate the RMD for each IRA separately each year. However, you may aggregate your RMD amounts for all your IRAs and withdraw the total from one IRA or a portion from each of your IRAs. You do not have to take a separate RMD from each IRA." (IRS)

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issuesmanAuthor

Level 2

Regarding the income annuity, the 1099R from the insurance company says that income annuities are treated differently and that while the total monthly payments will cover the RMD, not to use the fair market value of the annuity to calculate RMDs. They are apparently covered by Section 1.401(a)(9) of the tax code but I cant find that on the IRS website. So, I am confused as to how to treat them and how much pf the payments from the annuity is an RMD.

Any further thoughts?

PattiF

Level 15

All retirement accounts, which include IRAs and pensions, have to follow RMD rules once you reach 72 years of age.

To answer the question in TurboTax, you don't have to figure out your RMD. As long as you are receiving periodic payments, you can check yes, because the administrator of your plan has already calculated this. You would also say that all of the distribution is RMD.

@issuesman

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