IRA Death Distributions
What does RBD stand for in Beneficiary IRA?
Required Beginning Distribution
The official date by which a retirement account plan participant must begin taking required minimum distributions (RMDs)from their accounts.
What is the deadline to take your RMD for the first time?
April 1 of the year following the year that you turn 73
What is another name for a Roth Conversion?
Back Door Roth
When would the account holder have to pay the Qualified Withdrawal Penalty?
Before Age 59.5
When is the deadline for an IRA Recharacterization?
The tax-filing deadline, including extensions.
What Move Money transaction type would you use to move death distributions to a newly opened IRA at LPL?
Complex Retirement – Death Distribution
What is the SLA for setting up an RMD Service for LPL and EQH?
1 business day for LPL/ 5 business day for EQH
What is the minimum account balance for a partial Roth Conversion for the Traditional IRA account to remain open?
$41.00
What form would you use for an Excess Contribution?
CM108
When you recharacterize an IRA contribution, you transfer the contribution and______ to the new IRA?
Earnings
Who will sign the form to initiate the death transfer request to the beneficiary’s account?
Beneficiary and Advisor
Which form would you use to set up RMD Service?
Form CM111
What is the SLA for Roth Conversions?
Same day processing if in good order 1pm PT/ 4pm ET
What is the SLA for an Excess Contribution?
5 Business Days
What is the SLA for a recharacterization?
3 Business Days
If an IRA owner owed but did not satisfy their RMD the year of their passing, what happens?
When an IRA owner dies after her RBD, the year-of-death RMD must be taken.
Importantly, the RMD will be calculated as if the account owner was still alive.
Taxes can be withheld by _____.
By Percentage
When can withdrawals begin on a converted Roth IRA?
No withdrawals from a converted Roth IRA for 5 years after conversion and after age 59.5
Excess Contribution is taxed at which level until the contribution is removed from the account?
6% every year until the excess is removed.
What form number would you use for a recharacterization?
CM110
Non-designated beneficiaries (trusts, estates, and charitable organizations) must empty the Beneficiary IRA by when?
5 years
The five-year rule stipulates that the beneficiary must take out the remaining balance of the IRA over the five-year period following the owner’s death. There is no RMD in any one year, but the account must be fully depleted by Dec. 31 of the fifth year following the owner's date of death.
Name three RMD eligible account types?
Traditional IRAs, SEP IRAs
SIMPLE IRAs, 401(k) plans
403(b) plans, 457(b) plans
What three account types can be converted to a Roth IRA?
Traditional IRA
SEP IRA
SIMPLE IRA
The excess contribution and any earnings must be removed from the IRA that triggered the excess contribution is an example of what type of excess contribution fix?
Corrective Distribution
What is the previous IRA balance plus all contributions (including the excess one), consolidations, and transfers into the account since the contribution occurred.
Adjusted Opening Balance (AOB)