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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19414  
Subject: Re: For TMF Pixy Date: 1/18/2006 1:29 PM
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tilnow asks:

A family member turns 70.5 this year. The firm where the account is held says the required minimum distribution must be made between the date 70.5 is reached and April 15 of 2007. They say if the withdrawal is made earlier in 2006, it won't qualify as the required distribution, even though it was taken out in the correct tax year.

Might they be wrong?


Methinks the plan administrator is confused. If the minimum distribution is taken before the person turns age 70 1/2 and if that person turns age 70 1/2 before 12/31 in the year the distribution was taken, than an earlier distribution would still be counted as part of the required distribution for that year. All the IRS cares about is that the required amount is taken and reported for income tax purposes for the year.

Ask the plan administrator to cite the appropriate paragraph and verse in the reg, pub or statute in which that person believes his or her position is supported. The 1099-R in which distributions during the year are reported don't include the date the distribution was made, so how would the IRS know whether one occurred before or after age 70 1/2?

Hope that helps.

Regards ... Pixy


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