Potential losses related to IRA mistakes can be avoided by meeting imposed deadlines and by seeking the advice of a qualified professional. Here are some general guidelines regarding IRAs. If you have more than one IRA, the minimum can be taken from any one or more plans. However, if the beneficiaries of each are different, the distribution rules may apply separately. After the first distribution calendar year, the MRD must be made by December 31 of each year.
Designated beneficiaries are important in determining distribution.
Where their are multiple beneficiaries, the person with the oldest birthday is used as the designated beneficiary for distribution purposes. If the beneficiary is a charity or estate, it will be treated as no beneficiary. A trust can be named as the beneficiary of IRAs. Never name the estate as beneficiary. The Tax Reform Act of 1986 imposed an excise tax on distributions from qualified retirement plans and individual retirement accounts during the calendar year in excess of an indexed annual threshold amount and imposed an estate tax on an individual's excess retirement accumulation of funds.