Accrued interest

[ombskid]

An accountant asks if he must include accrued interest - shown on the IRA statement - in calculating a Required Minimum Distribution.

Any ideas?

[Guest Rajeev]

There is one particular consideration which could be used for deciding this, that is if the accrued interest is guaranteed to be received (either from the party providing it or through a third-party guarantor), then it could be used... This is typically done in the banking channel for IRA CD's wherein the accrued interest for the year is calculated for the purposes of the reporting, but I have also seen that the there is language in the CD opening documents that state that if the IRA CD is permitted to be broken prior to maturity (with penalty), then the accrued interest is not included.

So the best response is to look at the investment asset documents carefully.