Discussion:SELF Direct IRA - RMD - No cash available only Land

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Discussion Forum Index --> Advanced Tax Questions --> SELF Direct IRA - RMD - No cash available only Land

Discussion Forum Index --> Tax Questions --> SELF Direct IRA - RMD - No cash available only Land

Cody2826 (talk|edits) said:

18 July 2008
Can a Self Directed IRA owning land distribute a percentage of the land to meet the RMD requirement? I know the taxpayer will owe tax on the FMV distributed. I also have seen this done when a IRA distributes securities to meet the requirement. I'm trying to find somewhere in the code or regs that mentions this topic. I review the 408 code section, but no luck.


JR1 (talk|edits) said:

July 18, 2008
www.pensco.com is the first place I'd go, but clearly you've got a problem.

Cody2826 (talk|edits) said:

18 July 2008
The account is with Pensco, and I had no luck on their website.

Death&Taxes (talk|edits) said:

18 July 2008
Natalie Choate tells us that 'a particpant or beneficiary can take Ms in kind as well as cash. Plans are permitted to distribute property as well as cash.' It points to Reg. 1.401(a)(9)-5 and Reg. 1.408-8 to say that all distributions not specifically excepted there count toward the MRD.

Wes pointed me to Ms. Choate's invaluable book over a year ago.

Cody2826 (talk|edits) said:

18 July 2008
D&T, thanks..I wanted to get that book, but I actually forgot about it. Thanks for reminding me...

WesR (talk|edits) said:

18 July 2008
Hi D&T thanks for saving me the look up :) bye

Kevinh5 (talk|edits) said:

19 July 2008
Does the client perhaps have another IRA with marketable securities in it he can liquidate? For future years, can he roll a 401(K) into an IRA and NOT put it in real estate so that he'll have cash to distribute?

Marcilio (talk|edits) said:

19 July 2008
Does client have a valuation of the property?. Sometimes, the value of the underlying asset is less than the liabilities (common theme these days). If the value is zero, there is no RMD. I've seen companies report the book value or questionable valuations, when in fact the investment is worthless.

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