Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
RMD from IRA Acct to Non IRA Acct
Posted by: Capecod1, November 24, 2008 12:35AM
I must withdraw from my IRA account to satisfy my RMD by Dec 31st.
Can I withdraw Common Stock or Mutual Funds to satisfy my RMD and transfer the securities to my non IRA account, or must I sell securities and transfer cash. If securities can be transferred what would my cost basis in the non IRA account be. I paid a lot more than today's worth. Would the value be based on worth at time of transfer ??

Re: RMD from IRA Acct to Non IRA Acct
Posted by: Alan S., November 24, 2008 12:47AM
You can do an in kind distribution of stocks or fund shares and it will satisfy your RMD if the value upon distribution meets or exceeds the RMD amount. Your cost basis of the securities in your taxable account would be their fair market value upon distribution from the IRA. What you originally paid for the shares is immaterial.

There is a very small chance that Congress will pass RMD relief for 2008, and a much better chance that it will be for 2009. While the chance for 2008 is small, you might wait until mid December before doing the transfer.

Of course, the firm that holds your taxable account must be able to accept the securities you transfer. THe potential problem would be if you held proprietary funds in your IRA and used a different broker for your taxable account. Best to provide a statement showing the symbols of the securities to the broker of your taxable account to be sure they can accept them.

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