Discussion:RMD - "semi" publicly traded stock

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Discussion Forum Index --> Accounting Questions --> RMD - "semi" publicly traded stock


  • moving from the ACCOUNTING forum to the non-pro forum

Nugget89 (talk|edits) said:

10 July 2013
I had a financial advisor approach me with this scenario and I did not know how to answer.

They have a client who has a number of shares in a VERY thinly traded but volatile ~50 cent stock. On the last day of the year the stock price doubled before dropping back down again a few days later. This seems like price manipulation, although it is impossible to prove it.

Where this becomes an issue is that because of the RMD situation, it doubles the distribution and causes more of a tax hit. The custodian's hands are tied and they can only report the public value as of 12/31. Is there any way to report something different to the IRS. The general rule of thumb for asset valuation is “the price at which the investment would change hands between a willing buyer and a willing seller, neither of whom were under duress.” This client would not have been able to trade the stock as there likely were no willing buyers.

Any ideas or are they stuck?

Thanks!

Kevinh5 (talk|edits) said:

10 July 2013
If the custodian has already reported it, then it has already been reported. By the custodian.

Nugget89 (talk|edits) said:

10 July 2013
Is there no way to dispute the reported price or write a letter to the IRS? I know that's incredibly unusual for a publicly traded stock, but in this case that is almost a technicality. I'm not hopeful in this situation, but wanted to check it out for the advisors.

Kevinh5 (talk|edits) said:

10 July 2013
You can write as many letters as you want, you'll get nowhere. Or you can get a PLR if you'd like something official. If the rule is statutory, you won't make any progress with either. Take that up with your congressperson and get the law changed for the future.

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