IRA LLC / Checkbook IRA Required Beginning Date Top Items

The required beginning date (RBD) applies to IRA participants and IRA beneficiaries, and is significant because it results in having to take distributions from the IRA. Following are some important items to know about the RBD.

1. The RBD for IRA LLC owners is the date that required minimum distributions (RMD) must commence.

2. The RBD for IRA LLC owners is April 1 of the year after the year the IRA owner reaches age 70 1/2.

3. The first year of for which the RMDs must begin (distributions for the age 70 1/2) is the only year the IRA LLC owner can wait until the following April 1 to take the distribution.  For subsequent years, RMDS must be taken by December 31.

4. If the IRA LLC owner delays the firs RMD until the following year to distribute the first-year RMD, she must also take the second-year RMD by December 31 of the same year.

For example, when Cindy turns 70 1/2 on May 19, 2019, she can either take the her first RMD by December 31, 2019 or she can delay her first RMD and take it by April 1, 2020. If Cindy decides to take her first RMD by April 2020, she will also need to take her 2020 RMD by December 31, 2020.

5. If an IRA LLC owner dies before their RBD, there is no RMD due for the year of death, even if the IRA LLC owner was age 70 ½ at the time of their death.

6. If the IRA LLC owner dies after their RBD, the  RMD  due for that year must be distributed by the IRA beneficiary if the IRA owner did not make it prior to her death.

7. For IRA LLC owners who deceased prior to their RBD, the IRA beneficiary can elect to take required distributions over her life expectancy or by the end of the 5th year.

8. For IRA LLC owners who deceased on after their RBD, the IRA beneficiary can not delay distributions until the end of the 5th year.

9. If the IRA LLC owner dies on or after their RBD, the beneficiary can use the age of the IRA holders death or her age to to base the RMDs.

10. If the IRA LLC owner also participates in a solo 401k plan, the RMDs due from the IRA LLC must be distributed from the IRA LLC not the solo 401k plan.

11. Roth IRA LLCs are not subject to RMDs.

 

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