3698 / What are an IRA trustee's reporting requirements with respect to required minimum distributions?

Two reporting requirements are imposed on IRA trustees: one to the IRA owner, and one to the IRS.¹ For IRA owners, "[i]f a minimum distribution is required with respect to an IRA for a calendar year and the IRA owner is alive at the beginning of the year, the trustee that held the IRA as of December 31 of the prior year must provide a statement to the IRA owner by January 31 of the calendar year." The statement must satisfy one of the following alternatives:

(1)   It must inform the IRA owner of the amount of the required minimum distribution and the date by which it is required. The amount is permitted to be calculated assuming that the sole beneficiary of the IRA is not a spouse more than 10 years younger than the IRA owner, and that no amounts received by the IRA after December 31 of the prior year are required to be taken into account to adjust the value of the IRA as of December 31 of the prior year for purposes of determining the required minimum distribution.²

(2)   It must inform the IRA owner that a minimum distribution is required with respect to the IRA, and offer to calculate the amount of the distribution on request by the owner.³

The IRS has clarified that a trustee may use either of these two alternatives, or may use one alternative for some IRA owners and the other for other IRA owners.⁴

The reporting requirements apply only to lifetime distributions. The IRA owner is presumed not to have a spouse more than 10 years younger than the owner.⁵

No reporting is required for after death distributions (i.e. inherited IRAs) or for Roth IRAs.⁶