A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Pinnacle Retirement Group, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Pinnacle Retirement Group
(610) 707-9170

CLOSE

 

RMD CALCULATION AND TRUSTS FOR DISABLED BENEFICIARIES: TODAY’S SLOTT REORT MAILBAG

By Ian Berger, JD
IRA Analyst
Follow Us on X: 
@theslottreport

Question:

Hoping you can help with this technical question. I am over 73. My traditional IRA balance as of 12/31/22 was $0.00. I made a $7,500 non-deductible traditional IRA contribution in 2023 and converted the full balance ($7,508.23, including $8.23 of interest) to a Roth IRA in 2023. I did not do an RMD prior to the conversion, but I did not have a traditional IRA balance at the end of 2022 and my 2023 traditional IRA contribution was non-deductible.

Should I have taken an RMD prior to the conversion?

Answer:

Because you did not have a balance in your traditional IRA as of 12/31/22, you did not have an RMD for 2023. (If you had an RMD for 2023, you would have needed to take the RMD before doing the Roth conversion.)

Question:

I am 79, and my regular IRA and Roth IRA (started in 2001) both name my revocable trust as sole beneficiary.  My trust has a single beneficiary, my disabled daughter, aged 49, who receives SSDI.  At my death, what are the distribution requirements currently? (My daughter cannot manage her own affairs.  The trustee would handle the assets.)

Jeff

Answer:

Hi Jeff,

Since she qualifies as “disabled” under the strict tax code definition, your daughter is considered an “eligible designated beneficiary” under the SECURE Act inherited IRA rules. Therefore, assuming the trust qualifies as a “see-through trust,” RMDs can be paid out from both the traditional and Roth IRA to the trust over your daughter’s single life expectancy.

https://www.irahelp.com/slottreport/rmd-calculation-and-trusts-disabled-beneficiaries-today%E2%80%99s-slott-reort-mailbag

Ready To Take

THE NEXT STEP?

For more information about any of our products and services, schedule a meeting today.

Or give us a call at (561) 629-7820