I have a client that is self-employed (only employee) and over the age of 70 1/2. This year he opened a Keogh and contributed $35,000.

Since he is greater than a 5% owner he needs to make a RMD. Since his 12/31/00 Keogh balance was $0, what do I base his RMD on? Do I base it on his initial $35,000 contribution?

Thanks

Was the plan effective 1-1-2000, or 1-1-2001? Assuming the latter, you are correct - you would calculate his minimum distribution for 2001 based upon a zero account balance on 12-31-2000 - therefore a zero minimum distribution.