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RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

My financial advisor switched from Ameriprise to LPL in March 2024. I moved with him and transferred my traditional IRA to LPL. I had set up 26 bi-weekly withdrawals to cover slightly more than my RMD. TurboTax Home & Business sees the 1099-Rs for this account as being two separate accounts. When asked for the RMD in each one, I put the RMD required for the year, and TurboTax calculated that each required the same total RMD be taken from each, showing a penalty in each for failure to withdraw the required RMD. I am offered the opportunity to request a waiver of the penalty. 

 

My advisor says that I should be able to pay my annual RMD as though these were one account with the RMD being the total withdrawn from both accounts. However, various guides seems to indicate that transfer of an IRA from one firm to another requires payment of the full RMD from each account even though it is one IRA simply moved between firms

 

What is the proper way to handle this?

 

Do I accept TurboTax's indication that the full RMD had to be paid from Ameriprise and from LPL even though it was one account simply moved from one firm to the other? 

Do I prorate the amount of RMD due from each?

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1 Best answer

Accepted Solutions
dmertz
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

As long as the total RMD was satisfied, for each Form 1099-R enter as the required RMD no more than the gross distribution amount shown on that Form 1099-R.  What matters is that the total of such entries for distributions from your traditional IRAs is at least as much as your total RMD from these accounts combined.  You can actually split total between these Forms 1099-R any way that you wish as long as the total is at least as much as your total RMD and no entry exceeds the gross distribution amount for the particular Form 1099-R.

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4 Replies

RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

 
dmertz
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

As long as the total RMD was satisfied, for each Form 1099-R enter as the required RMD no more than the gross distribution amount shown on that Form 1099-R.  What matters is that the total of such entries for distributions from your traditional IRAs is at least as much as your total RMD from these accounts combined.  You can actually split total between these Forms 1099-R any way that you wish as long as the total is at least as much as your total RMD and no entry exceeds the gross distribution amount for the particular Form 1099-R.

RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

That is what I thought it had to be. But walking through it in TurboTax Home and Business doesn't make that clear at all. So it was calculating huge penalties and the need for a waiver. Maybe some more instructions there for anyone who has moved their IRA between firms would be helpful.

dmertz
Level 15

RMD withdrawal when an IRA is transferred between Ameriprise and LPL part-way through the year

This has created confusion for nearly everyone who has satisfied an IRA RMD for one of their traditional IRAs by taking the distribution from a different one of their traditional IRAs.  The TurboTax developers really dropped the ball on this change to TurboTax by not having a good understanding of the related tax code.

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