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Question: Is it too late for a client to take a required minimum distribution for 2011 from her traditional IRA?
Answer: If the client turned 70 ½ in calendar year 2011, she had until April 1, 2012 to take her RMD.
If the client turned 70 ½ in a year prior to 2011, she was required to take the distribution by the end of 2011.
If a taxpayer fails to take an RMD by the deadline, the IRS imposes a special penalty tax of 50% on the amount that should have been distributed. The penalty tax may be waived if
- the taxpayer convinces the IRS that the failure to take the RMD was due to reasonable error, and
- that reasonable steps are being taken to fix the problem.
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