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No. of Recommendations: 2
I would definitely do it earlier than December just so that if there are any errors or something comes up like you are in the hospital, then there is more time to get it done or get it corrected.


...If you are convinced 2011 will be a good year for the fund, you can defer taxes most effectively leaving the shares in the IRA as long as permitted. ....

True but there are also some downsides;

1) The gains in the IRA will eventually be taxed at the ordinary income tax rate when it is withdrawn, compared to the eventual capital gains tax if it were put in the taxable account earlier in the year. Qualified dividends are also taxed at a lower rate in the taxable account.

2) The gains within the IRA will also cause the next years RMD to be larger because of higher IRA balance at the end of the year. A nice "problem" to have!

3) If the stock goes down, then you will not be able to take a capital loss in the taxable account.

4) If you delay the distribution until late in the year, you may have to sell other assets to cover your expenses earlier in the year.

Realistically there are so many variables that the optimal date will probably vary from year to year so you might just split the difference and do it in June if you are worried about when the best time to do it is.

I would be tempted to just do it earlier in the year to make sure that it gets done. The penalties for not doing an RMD are so outrageous that I would not want to take any chances of it not getting done correctly. Having it automatically scheduled for April 15th is an easy way to remember it since you will need to deal with taxes around then every year.


Greg
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