Pub. 2 2012-2013 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2013 13 Q RMD Season  continued on page 14 participants who need to take RMDs. In fact, IRA adminis- trators must submit certain RMD information to IRA owners in January each year to fulfill RMD statement requirements. This statement may include an RMD amount that is based on certain assumptions. If an RMD amount is not included, the IRA administrator must calculate the RMD upon request. Doing the Math According to IRS Treasury regulations, the RMD is cal- culated by dividing the account balance by an applicable distribution period. Account balance – When calculating the RMD for an IRA, the December 31 balance of the immediately preceding year is used and may need to be adjusted as follows. • Add to the December 31 IRA balance any distributions taken within the last 60 days of a year and rolled over after January 1 of the next year. • Add to the balance any outstanding transfers not received in the same calendar year that they were distributed from the IRA. • If a conversion or a retirement plan rollover to a Roth IRA is recharacterized (with the net income attributable) to a Traditional IRA, add the total amount of the recharacterization to the December 31 balance of the year in which the conversion or plan rollover occurred. (For example, retirement plan assets rolled over to a Roth IRA in 2012 that are recharacterized to a Traditional IRA in 2013 are added to the December 31, 2012, Traditional IRA balance for purposes of the 2013 RMD calculation.) For retirement plan RMD calculations, the account bal- ance used is the balance as of the last valuation date of the immediately preceding calendar year (the valuation year). Such amount is adjusted as follows. • Add to the balance any contributions or forfeitures allocated to the account balance after the valuation date, but during the valuation year. • Subtract any distributions made in the valuation year that may have occurred after the valuation date. Distribution period – The account balance is divided by a distribution period. The distribution period is obtained from one of the IRS life expectancy tables and is based on the account owner’s age on her birthday in the year for which the distribution is required. Most RMD calculations require Rothgerber Johnson & Lyons LLP Banking Group Denver · Colorado Springs · Casper U Affiliate Transactions U Asset-Based Lines of Credit U Bank Operations U Branch Banking U Compliance and Disclosure U Consumer Finance U Credit Document Drafting and Review U Creditor's Rights/Bankruptcy U De Novo Financial Institutions Charters U Factoring U Foreclosures and Collections U Holding Company Formations U Lender Liability U Lending Limit Advice U Leveraged Acquisitions U Litigation U Loan Originations and Modifications U Loan Restructuring U Mergers and Acquisitions U New Product Development U Project Finance U Recapitalization U Regulatory Advice U Regulatory Enforcement Defense U REO Disposition U Stock Offerings U Strategic Planning U Subchapter S Corporate Restructuring U Uniform Commercial Code U Use of ESOPs Nationally recognized for our corporate, regulatory, and litigation practices for community banks 303.623.9000 · www.rothgerber.com Creative Solutions Since 1903 Robert S. Arthur, Jr. Justin H. Boyd Tennyson W. Grebenar Stephen T. Johnson William P. Johnson Kevin M. Kelly David P. Kunstle Lindsay L. McKae Mark A. Meyer Bruce N. Warren Karen L. Witt