ExpertMedium1 markMultiple Choice
CPA · Question 15 · Area I: Individual Compliance and Planning
A taxpayer turns age 73 in Year 1. They have a Traditional IRA with a balance of $500,000 as of December 31, Year 0. The Uniform Lifetime Table factor for age 73 is 26.5. What is the deadline and amount for the first Required Minimum Distribution (RMD)?
A taxpayer turns age 73 in Year 1. They have a Traditional IRA with a balance of $500,000 as of December 31, Year 0. The Uniform Lifetime Table factor for age 73 is 26.5. What is the deadline and amount for the first Required Minimum Distribution (RMD)?
Answer options:
A.
December 31, Year 1; Amount $18,868
B.
April 1, Year 2; Amount $0 (RMDs start at 75)
C.
April 1, Year 2; Amount $18,868
D.
April 1, Year 2; Amount $50,000
How to approach this question
Identify the Required Beginning Date (April 1 of year following age 73). Calculate amount: Prior Year End Balance / Life Expectancy Factor.
Full Answer
C.April 1, Year 2; Amount $18,868✓ Correct
IRC §401(a)(9). Under SECURE 2.0, RMD age is 73. The first distribution must be made by April 1 of the year following the year the taxpayer turns 73. Calculation: $500,000 / 26.5 = $18,867.92.
Common mistakes
Thinking the deadline is Dec 31 of Year 1 for the first payment.
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