Withholding for beneficiary

[ombskid]

Two partners in a profit sharing plan. They are each others beneficiary.

One partner dies. His first RMD would be in 2010. Beneficiary wants to take a partial distribution that would be significantly more than the RMD, then roll over the balance into a beneficiary IRA.

RMD is 11,000. He will take 50,000 total.

The RMD portion is not subject to mandatory withholding. What about the balance?

[Belgarath]

The balance is subject to mandatory withholding. However, this can be avoided by the simple expedient of having it directly transferred to the beneficiary IRA, rather than having it paid directly to the beneficiary first.

[Kevin C]

The balance is subject to mandatory withholding if the beneficiary is the surviving spouse.

Distributions to a nonspouse beneficiary are subject to voluntary withholding since mandatory withholding does not apply.

[Belgarath]

Kevin - afraid I disagree. Section 108(f)of WRERA amended IRC 402©(11)(A)(i) for plan years beginning after 12-31-2009. These are now "eligible rollover distributions" and mandatory withholding does then apply.

[ombskid]

Kevin - afraid I disagree. Section 108(f)of WRERA amended IRC 402©(11)(A)(i) for plan years beginning after 12-31-2009. These are now "eligible rollover distributions" and mandatory withholding does then apply.

Thanks. I thought it was.