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Required Minimum Distributions And Closed IRAs

paoli2
paoli2   |     |   2,222 posts since 2011

I have run upon a question I hope someone can clarify for me.  In 2014, my spouse and I closed our IRAs we had with certain local banks and transferred them to new institutions.  Now it is 2015, and I am trying to figure out how much RMDs we will owe on IRAs.  I know I have to get the figure from the 12/31/14 year end balances etc. but do I have to go back to the date in 2014 when I closed the other IRAs and also figure the RMD for the closed IRAs also?  It seems to me that the amount of the closed IRAs are in the 2014 year end balances for the new IRAs and I don't want to end up having to be taking more withdrawals than we have to.  Do we just figure the total RMDs from whatever we have left at year end 2014 if the money was transferred to these new institutions? 

Thanks so much for any information you can provide.  I tried asking the banks but they have no idea what I am supposed to do.  Much appreciation for any advice.



Answers
Ally6770
Ally6770   |     |   1,961 posts since 2010
Publication 590 answers all questions on IRA's 
paoli2
paoli2   |     |   2,222 posts since 2011
I checked Pub 590 before I posted my question.  The answer was not found or if it was in there, I missed it.  I guess you don't know the answer either or you certainly would have posted it.  I think I only have to be concerned with the balances of the IRAs we still own on 12/31/14 so I won't be double dipping.  The balances of the former IRAs would be in the new ones anyway.  That is the only thing that makes sense in this case.
Ally6770
Ally6770   |     |   1,961 posts since 2010
In the 80's I went with my mother to do a rollover to a local credit union from Comerica bank.
Comerica did not take out her RMD and the credit union would not do the transaction until they (the credit union) took out her RMD and then then did the CD after the RMD. I tried to get them to do the CD or at least put it in the traditional IRA savings account first and then take out the RMD for a paper trail but they would and did not so we saved the cashier check stub and had the person doing the transaction sign and date and state that this was her RMD. There were no tax consequences from doing it that way. I never heard of having to take the RMD before a rollover until then. Not sure if that is law or policy of all or some of the banking institutions. In the 30 years I worked in a bank I never did it but then maybe the transactions I did were not from people that were old enough for  their RMD's. 

That was the only time that I have went with someone who was doing a rollover and old enough for a RMD.

I have done transfers this year (2015) but they have been with Roth's so I am not sure if they still do this. Another credit union did a conversion to a Roth in 2014 without requiring a RMD beforehand though. I also had a traditional IRA CD mature but I had that renewed in 2015 and did not do a transfer and a RMD was not required. 

If your tax agent relative cannot help you call IRS 1-800-829-1040. They are very helpful and are open 7am to 7pm.

Have paper and pencil ready because each agent or specialist or lawyer with give you their
ID number. Write down the date and time of the phone call as well as each persons ID number. I have never received incorrect information from the IRS. 
paoli2
paoli2   |     |   2,222 posts since 2011
I always ask my bank if they charge penalties for taking the RMD out of the CD when due and they all over the years have told me they can't penalize us because it is a Federal law that we must do the RMDs.  This new bank where I transferred to last year from Chase gave me the same assurance but I will not know what will happen until I go by and try to take the RMD this year.  I know our brokerages say since our CDs with them are purchased a different way that we must have a CD maturing around the date we need the RMD and just use that money for the RMD.  So with them, I have made sure I have big enough CDs maturing in the early part of each year so that I can contact them to transfer the RMD to our local bank's checking acccount.  I always like to do it around tax time so I can pay our estimated taxes in one lump sum for the entire year with the funds.  I know I am losing some extra interest by doing it early in the year but at my age, convenience and peace of mine is worth something also.  It can't all be about making every extra cent in interest any more.  If we didn't do our jobs in our younger years, it's too late to play catch up as a senior and being retired (at least DP since I was mainly a "stay at home" mom).

I am swamped with personal responsibilities right now but soon I may call the new IRA bank and make sure the manager gave me correct info for my RMD.  DP's is all set with a CD maturing just when we need it.  This time of year is exhausting for me and to make sure I fall apart sooner, I just insisted on making a new batch of Spaghetti Sauce to have extra food in our tiny freezer to feed the family while I am doing taxes and finances soon!  Have to eat! :)
Ally6770
Ally6770   |     |   1,961 posts since 2010
The bank or credit unions policy should be in your disclosure that SHOULD have been given to you at at the time of opening the account. One of the credit unions I belonged to changed its policy in their new disclosure but they are now state and not federally charted. This may make a difference. 
I am grandfathered they said even with new IRA CD's.