Discussion:IRA Minimum Required Distribution

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Discussion Forum Index --> Tax Questions --> IRA Minimum Required Distribution

Aslotkin (talk|edits) said:

13 December 2005
One of my clients died in October without having taken his minimum required distribution. The police are investigating the question of whether his named beneficiary murdered him. His siblings have obtained a court order freezing all of his bank and brokerage accounts. 2005 is rapidly running out. Is anyone aware of a ruling or case in which a distribution could not be made because of a court restriction?
 Arnold Slotkin

Umk395 (talk|edits) said:

15 December 2005
See Rev Ruling? You'll have to research this matter. It's an interesting question.

Rlw (talk|edits) said:

15 December 2005
Unless you can unfreeze the IRA in time to take out the MRD, taxpayer will have to pay the penalty and recover it later.

I had a similar occurrence (minus the murder mystery).

In October 2002, my father died without having taken either of my parents' MRDs from their IRAs. By the time I realized that had happened (like the following April when doing their tax returns), it was too late to get the MRD taken for 2002. What I did was:

1. Took out the MRD for 2002 ASAP, even though it was already 2003.

2. Prepared the 2002 returns telling the truth, that the MRD had not been taken.

3. Paid the (huge!) penalty for failure to withdraw the MRD.

4. Included, with the tax return, a letter explaining why the MRD had not been taken in 2002, and that it had been taken once I realized what had happened. Asked for the penalty to be refunded due to tragic and extenuating circumstances.

5. Waited.

6. After hearing nothing for several months, wrote to the IRS again, enclosing a copy of the letter and asking for a response.

7. Waited some more.

8. Received a full refund of the penalty plus interest from the IRS, along with a letter indicating a real person had reviewed my case and found my argument of merit.

This was one of several instances which have led me to believe that there are real human beings working at the IRS and that, if you deal with them honestly, politely, and according to their rules, they will treat you fairly.

Aslotkin (talk|edits) said:

26 December 2005
An end to the problem but not the question:
  The solution to my problem came suddenly on Friday when the court ordered me to compute the 2005 required distribution. It is going to be distributed to the named beneficiary despite the continuing police investigation. This rather strange result came about under an agreement between the beneficiary and the decedent's family and is in lieu of a bond that the court wanted posted in order to continue the freeze on the decedent's assets. Thanks for the help. I'd still like to know if there is some reasonable answer to this question other than throwing yourself at the mercy of IRS.

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