Monday, December 11, 2006


If you accessed this Blog thru BLOGLINES, click: which will contain the complete posting and linkage to other information.

After you read this if you need further, more detailed information see IRS Forms and Publications at

Required Minimum Distribution ( RMD) from IRAs
REFERENCES: IRS Publications 575 and 590,Also see Instructions for Form 5329
(available at IRS web site shown above)

If you turned age 70½ in August of 2006. You have two choices:
Take RMD By Dec 2006, then take it again by Dec 2007.
Wait until April 1 2007, then take it again by Dec 2007 (both in same year)

After the first RMD you will always have to take it by Dec 31 each year.
You would use your life expectancy in the year of withdrawal, BUT
You would use your IRA balance at the end of the prior year.
Or to put it another way, the Distribution Year is the Tax Year + 1.
For example: Tax year =2006 (to be filed in 2007)
You would use your age you will be at the end of 2007 in calculating life expectancy for your 2007 RMD

For example:
Your IRA is $100,000 Dec 31, 2006
You turn 73 in 2007
You use a factor of 24.7 (from the Uniform Life Table)
Your RMD is $4049 in 2007 (100,000 divided by 24.7)

If your spouse is more than 10 tears younger than you
If your spouse (any age) is not your sole beneficiary
If you acquired your IRA by inheritance.
If these exceptions apply, a different life expectancy is involved. See the IRS publication for Lifetime tables.

Due to all these alternative ways an RMD may be calculated, you should proceed with caution and be sure you choose the correct method. Life expectancy tables are published by the IRS and should be used to make sure you take out enough or you will be penalized.

This information is not intended to be advice to the recipient.In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.

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