RMD

Those fortunate enough to be named a beneficiary of a retirement account will want to know the nuances for reporting income on their tax return. This is specifically important when the account holder passes away before or after the time they are supposed to take required minimum distributions (RMDs).

What are required minimum distributions?

Traditional IRA and 401(K) account holders are required to start taking minimum distributions when they reach the age of 70 ½, even if they are still working for an employer at the time. However, in the first year they are required to take distributions, they can defer it until April 1st of the following year.

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