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WA49ER:

If you have insufficient cash in the IRA account to make the RMD withdrawal, you will need to sell assets to obtain the needed cash.

There is no tax liability when you sell assets held in an IRA. The only tax liability occurs when you withdraw funds from the IRA. The funds withdrawn fro the IRA will be taxed as ordinary income by Federal, state, and local tax authorities.

I am 72 and have completed my third year of the dreaded RMD withdrawals. The two small pensions that I receive from former employers are taxable as ordinary income. My Social Security retirement benefit and my wife's spousal benefit were not taxable until I started making RMD withdrawals the year I turned 70-1/2. Eighty-five percent of our Social Security benefits are now taxable as ordinary income and at the 25% marginal tax rate due to RMD withdrawals.

At least my Vietnam Era VA Disability Compensation is not taxable.
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