Avoid Selling Your Retirement Assets With In-Kind RMDs
Francis and Reeves Advisory
We help business owners create their legacies by minimizing tax burdens and maximizing bottom-line profits.
If you turned 72 this year or are older, you must take a required minimum distribution (RMD) by the end of the year. An RMD can be taken from your traditional IRA, SEP-IRA, or Simple IRA.?
An RMD is the percentage of value across a person's retirement accounts based on their life expectancy and age. The older you get, the more that you must distribute. It is important to note that these percentages of value are based on the prior year. So, even if you have less in your retirement accounts this year than last, you will still pay the percentage of the previous year.?
Many people opt to do an in-kind distribution to fulfill their RMD. With an in-kind distribution, you can transfer stocks, bonds, mutual funds, or other securities from your IRA directly to a taxable account. The amount of your RMD is the fair market value of the stock or other securities at the time of the transfer.?
By opting for an in-kind distribution you would still pay the income tax on the distribution however, you avoid selling the securities and you can pay the tax with other funds, such as a bank account. The transfer of securities may reduce taxes owed on future appreciation when you do choose to sell because, at the time of transfer, the assets reset value. Taxes would only be incurred on the amount gained over your new basis.?
领英推荐
An in-kind distribution may be the right tax-saving decision you make before the year-end. Find out if this is the right course of action for you by signing up for a free consultation with one of our tax experts here.?
If you have any questions about in-kind RMDs or our services, please call our direct line at (817) 383-0927.
Sincerely,
The Francis and Reeves Advisory Team