2009 Required Minimum Distribution taken in 2010

[AKconsult]

Did anyone else understand that Marty Pippin indicated in the IRS teleconference on 10/28 that if a person is first eligible for an RMD in 2009 and he decides not to waive it but takes it in 2010 (prior to April 1) that he will NOT be able to roll it over, whereas if he takes it in 2009 he can roll it over?

I can't seem to find any information on this now but my recollection is that Marty felt like WRERA only amended the code to allow rollovers for distributions taken DURING 2009, so an RMD for 2009 taken in 2010 couldn't be rolled.

[masteff]

Sec 201(a) of WRERA uses the phrase "calendar year 2009" and 201(b) uses "during 2009".

You could argue that a distribution by 4/1/10 is for calendary year 2009 but is it worth the fight? Also, the reason to wait until April 1st is to defer the taxable income into the later year, but if you're rolling it over, then there's no tax reason to wait.

Full text of WRERA here: http://frwebgate.access.gpo.gov/cgi-bin/ge...7327enr.txt.pdf

[Kevin C]

If all the participant is receiving in 2010 prior to April 1 is the amount that would have been the 2009 RMD, the payment would be the first of a series of substantially equal payments ... and not eligible for rollover. See 1.402©-2, Q&A 5. But, since it isn't a 2009 RMD, it should count towards satisfying the 2010 RMD.

If the participant is receiving a distribution of the entire balance in 2010 before April 1, it should be eligible for rollover except for the portion that is the 2010 RMD.

[Kevin C]

Rollover of what would have been 2009 DC plan RMD's came up in the Keeping Current session of the ASPPA annual conference. Derrin Watson mentioned that installment payments that included what would have been the 2009 RMD could be rolled over. I hadn't heard that before, so I looked it up when I got back to the office. The following is from Notice 2009-82.

Rollover relief for plans. Payments to a plan participant in 2009 will not be treated as ineligible for rollover on account of § 402©(4)(A) if the payments equal the 2009 RMDs or are one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the participant, the joint lives (or joint life expectancy) of the participant and the participant's designated beneficiary, or for a period of at least 10 years. Accordingly, such payments can be rolled over, provided the other rules of § 402© are satisfied. To assist plan participants who have already received distributions in 2009 but may have been unsure of which amounts could be rolled over, the Service, under the authority of § 402©(3)(B), is hereby extending the 60-day rollover period, for any 2009 RMD and for any additional payments that are part of a series described in the first sentence of this paragraph, so that it ends no earlier than November 30, 2009.

Maybe the comment on the IRS teleconference came from Notice 2009-82 instead of WRERA?