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During times of market volatility in the past, Congress waived RMDs in efforts to help alleviate client financial woes. The main concern came down to those who feared that if the value of their individual retirement accounts decreased, they would “be forced to sell the stocks (or funds) in their IRAs at low values.” However, this is not the case.READ THE ARTICLE
RMDs in kind: As tax expert, Ed Slott, says, “You don’t have to sell stocks in IRAs to take RMDs.” In most cases, account owners will not have all IRA funds in stock holdings, and additionally, RMDs are typically a small percentage. On the other hand, in the instance there is not a sufficient amount of liquid funds in an IRA to meet RMDs, the amount can be taken in kind as stock “by transferring the shares from the IRA to a regular taxable brokerage account.”
Tracking stock basis: If you do take your RMDs in the form of stock, it’s important to track the basis so you can “accurately compute the gain or loss when the stocks are sold.” You will want to keep a keen eye on what the shares were worth upon distribution from the IRA. This value becomes the new basis for “determining the gain or loss on a future sale (except if the shares are held until death, when heirs receive a step-up in basis, eliminating the capital gain on lifetime appreciation).” Additionally, Slott advises that when it comes to market declines, any decrease in share will not decrease RMDs, which have already been locked in.
Deploy a strategy: Having to take your RMD does not mean you are forced to exit the market. You can take your distributions in kind or keep it simple and take it in cash, followed by reinvestment.