RMD for Fiscal Year End plan

[K-t-F]

Client is an October 31 fiscal year end plan... When calculating the RMD, I can use the plan year end balance, correct? Do not have to determine what is in the plan on December 31.

[WDIK]

From Treasury Reg. 1.401(a)(9)-5:

Q-3. What is the amount of the account of an employee used for determining the employee's required minimum distribution in the case of an individual account?

A-3. (a) In the case of an individual account, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year immediately preceding that distribution calendar year (valuation calendar year) adjusted in accordance with paragraphs (b) and © of this A-3.

[K-t-F]

Excellent, Thank you. I was reading 401(a

)(9) and must have skimmed past that.

[K-t-F]

WDIK... would you confirm the following:

Client needed a RMD dist for 2004...

10/31 PY

First RMD would be for 2004 and would be based on 10/31/03 balance due on 4/1/05

2nd RMD would be for 2005 based on 10/31/04 balance due on 12/31/05

Correct?

[Guest mjb]

In what year did the employee attain 70 1/2? 04?

[K-t-F]

YES, DOB 1/20/34

[WDIK]

would you confirm

That looks correct to me. (Except it might be more correct to say "by" instead of "on")

[Earl]

would the 2nd RMD be based on the 10/31/04 balance less the 1st RMD amount if not taken by 10/31/04?

[WDIK]

The regulation previously cited goes on to say:

(b) The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded.

(c ) The account balance is decreased by distributions made in the valuation calendar year after the valuation date.