The plan that I am working on is a one person plan. It terminated and all assets were distributed out of the plan into an IRA in 2003. The one participant is over age 70 1/2 and is required to take a minimum distribution for 2002 from the plan. The participant had thought that the rollover of his entire account had happened prior to the end of 2002 and did not take the required minimum distribution from the plan.

1. How does he correct this now? Can he take it from the IRA?

2. The 50% excise tax - What form is this tax submitted on?

Any suggestions on how to correct would be appreciated.

Thank you.

He should take the 2002 mrd, pay the 50% excise tax and ask for a waiver of the excise tax see instructions to form 5329 and Pub 575. He should retain tax counsel to request the waiver. Also take the 2003 mrd by 12/31.