Nassau Posted March 20, 2013 Posted March 20, 2013 If a person holds an ownership interest of greater than 5% in ABC Company, but the person is not an employee of ABC Company, and he or she does not receive a salary /guaranteed payments from ABC Company, Is this person required to take an RMD from the ABC Company if he or she meets the RMD requirements? I thought for purposes of section 401(a)(9), a 5-percent owner is an employee of the company and in this situation since the person is not an employee of the ABC Company and did not receive a salary/guaranteed payments from ABC Company he or she would not be required to take an RMD from the ABC Company.
BG5150 Posted March 20, 2013 Posted March 20, 2013 Anyone over 70 1/2 who has "retired" must take an RMD. 5% owner or not. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
david rigby Posted March 20, 2013 Posted March 20, 2013 What do you mean "RMD from the ABC company"? RMD comes from the plan. Is the 5% owner a participant in the plan? Nassau 1 I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
GMK Posted March 20, 2013 Posted March 20, 2013 RMD's are due from ABC retirement plan http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Required-Minimum-Distributions-(RMDs) or are you asking if he has to start selling off his ownership?
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