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RMD
I understand what RMD means, however does that apply if you are only drawing interest out of your investement account? Please explain to me.
Thank you for your help. I look forward to a reply from you.
Marie
macuser_22Answer
Alumni - Champ
June 17, 2020
@billymarie wrote:
I understand what RMD means, however does that apply if you are only drawing interest out of your investement account? Please explain to me.
RMD's apply to qualified retirement accounts, such as IRA's, and section 401 accounts such as 401(k)' s and defined benefit pension plans.
Personal brokerage accounts are not qualified retirement plans.
Virtually all pension plans, defined contribution plans, and annuities in existence today fall under section 401 of the tax code.
Required minimum distributions for defined benefit plans and annuity contracts all require RMD's after age 70 1/2. If you receive periodic (monthly) payments from any pension plan you can be assured that the custodian of the plan is meeting the requirements so you can safely answer "yes" to the question.
The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).
The answer to the question does not go on your tax return, it is simply to make sure you do not owe any penalty for not taking the RMD or use it for an ineligible rollover.
The question is just to be sure that the requirement was met.
https://ttlc.intuit.com/replies/3302117
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
