BG5150
Dec 12 2008, 03:23 PM
A person's 2007 RMS is based on her 12/31/2006 account balance. For argument's sake, let's say the RMD is $1,000. She never takes it.
When I calculate the 2008 RMD using the 12/31/2007 balance, I don't reduce the balance by$1,000 because of the previous year's RMD do I?
(Did it used to be done like that?)
Sieve
Dec 12 2008, 06:25 PM
Yes, you do determine the following year's MRD by reducing the appropriate balance by the amount of the MRD not taken. Look at Appendix A, .06, of the new EPCRS - Rev. Proc. 2008-50. (Of course, you could do it the way you suggest--it would require a larger MRD in the following years, and therefore would be more costly to correct, but I don't suspect that the IRS would have any trouble with that approach.)
By the way -- I hope you plan to correct the missed MRD under EPCRS.