Common use of Distribution of Nondeductible and Nontaxable Contributions Clause in Contracts

Distribution of Nondeductible and Nontaxable Contributions. If any of your traditional IRAs contain nondeductible contributions, rollovers of nontaxable distributions from employer sponsored eligible retirement plans, or other nontaxable basis amounts, any distributions you take from any of your traditional IRAs or SIMPLE IRAs, that are not rolled over, will return to you a proportionate share of the taxable and nontaxable balances in all of your traditional IRAs and SIMPLE IRAs at the end of the tax year of your distributions. IRS Form 8606, Nondeductible IRAs, has been specifically designed to calculate this proportionate return. You must complete IRS Form 8606 each year you take distributions under these circumstances and attach it to your tax return for that year to validate the taxable portion of your SIMPLE IRA distributions reported for that year. Required Minimum Distributions (RMDs) For You. 1. After Age 70 1/2. Your first RMD must be taken by April 1 following the year you attain age 70 1/2, which is your required beginning date (RBD). Second year and subsequent distributions must be taken by December 31 of each such year. An RMD is taxable in the calendar year you receive it. 2. Distribution Calculations. Your RMD will generally be calculated by dividing your previous year-end adjusted balance in your SIMPLE IRA by a factor from the uniform lifetime table provided by the IRS. This table is indexed to your age attained during a distribution year. This table is used whether you have named a beneficiary and regardless of the age or type of beneficiary you may have named. However, if for any distribution year, you have as your only named beneficiary for the entire year, your spouse, who is more than ten years younger than you, the uniform lifetime table will not be used. To calculate your RMD for that year you will use the ages of you and your spouse at the end of that year to determine a joint life expectancy factor from the IRS's joint and last survivor table. This will be the case even if your spouse dies, or you become divorced and do not change your beneficiary, during that year. The fair market value of a qualifying longevity annuity contract (QLAC) is not included in the adjusted balance for RMD calculations.

Distribution of Nondeductible and Nontaxable Contributions. If 1. After Age 73. Your first RMD must be taken by April 1 following any of your traditional IRAs or SIMPLE IRAs contain nondeductible contributionsthe year you attain age 73, which is your required beginning date contributions or rollovers of nontaxable distributions from employer (RBD). Second year and subsequent distributions must be taken by employer-sponsored eligible retirement plans, or other nontaxable basis amounts, any distributions you December 31 of each such year. An RMD is taxable in the calendar take from any of your traditional IRAs or SIMPLE IRAs, that are year you receive it. not rolled over, will return to you a proportionate share of the 2. Distribution Calculations. Your RMD will generally be calculated taxable and nontaxable balances in all of your traditional IRAs and by dividing your previous year-end adjusted balance in your IRA by SIMPLE IRAs at the end of the tax year of your distributions. IRS a divisor from the uniform lifetime table provided by the IRS. This Form 8606, Nondeductible IRAs, has been specifically designed to calculate this proportionate return. You must complete IRS Form 8606 each year you take distributions under these circumstances and attach it to your tax return for that year to validate the taxable portion of your SIMPLE IRA distributions reported for that year. Required Minimum Distributions (RMDs) For You. 1. After Age 70 1/2. Your first RMD must be taken by April 1 following the year you attain age 70 1/2, which is your required beginning date (RBD). Second year and subsequent distributions must be taken by December 31 of each such year. An RMD is taxable in the calendar year you receive it. 2. Distribution Calculations. Your RMD will generally be calculated by dividing your previous year-end adjusted balance in your SIMPLE IRA by a factor from the uniform lifetime table provided by the IRS. This table is indexed to your age attained during a distribution year. This calculate this proportionate return. You must complete IRS Form table is used whether you have named a beneficiary and regardless of the age or type of beneficiary you may have named. However, if a. Spouse Beneficiary. Your spouse beneficiary may have the for any distribution year, you have as your only named beneficiary option of distributing the IRA assets over a single life expectancy for the entire year, your spouse, who is more than ten years period or within ten years (the ten-year rule). The option to elect younger than you, the uniform lifetime table will not be used. To the ten-year rule is only available to your spouse if your death calculate your RMD for that year year, you will use the ages of you and occurs before your RBD. Your spouse may alternatively choose your spouse at the end of that year to determine a joint life to treat the entire interest (all of the account) of the IRA as expectancy factor divisor from the IRS's joint and last survivor table. This his/her own IRA. will be the case even if your spouse dies, or you become divorced If your spouse beneficiary elects or otherwise has to take the and do not change your beneficiary, during that year. The fair market value of single life expectancy option, he/she will use a qualifying longevity annuity contract (QLAC) is not included in the adjusted balance for RMD calculations.life expectancy

Distribution of Nondeductible and Nontaxable Contributions. If over will be subject to taxation and considered an excess any of your traditional IRAs contain nondeductible contributions, contribution until corrected. rollovers of nontaxable distributions from employer employer-sponsored 6. Transfers of RMDs. Transfers are not considered distributions. eligible retirement plans, or other nontaxable basis amounts, any You can transfer any portion of your traditional IRA or SIMPLE distributions you take from any of your traditional IRAs or SIMPLE IRA at any time during the year provided you satisfy your aggregate IRAs, that are not rolled over, will return to you a proportionate RMDs before the end of the distribution year. share of the taxable and nontaxable balances in all of your 7. Qualifying Longevity Annuity Contract (QLAC). The fair market traditional IRAs and SIMPLE IRAs at the end of the tax year of value of any QLAC you hold in this IRA is not included in your distributions. IRS Form 8606, Nondeductible IRAs, has been determining your adjusted account balance when calculating your specifically designed to calculate this proportionate return. You must RMD. If however, you make an excess premium payment (premium complete IRS Form 8606 each year you take distributions under payment that causes you to exceed the $200,000 (as adjusted)) and these circumstances and attach it to your tax return for that year to the excess premium is returned to the non-QLAC portion of your validate the taxable portion of your SIMPLE IRA distributions IRA after the valuation date to determine the next year's RMD, such reported for that year. Required Minimum Distributions (RMDs) For You. 1. After Age 70 1/2. Your first RMD must be taken by April 1 following amount is added to the adjusted account balance used for the year you attain age 70 1/2, which is your required beginning date (RBD). Second year and subsequent distributions must be taken by December 31 of each such year. An RMD is taxable in the calendar year you receive it. 2. Distribution Calculations. Your RMD will generally be calculated by dividing your previous year-end adjusted balance in your SIMPLE IRA by a factor from the uniform lifetime table provided by the IRS. This table is indexed to your age attained during a distribution year. This table is used whether you have named a beneficiary and regardless of the age or type of beneficiary you may have named. However, if for any distribution year, you have as your only named beneficiary for the entire year, your spouse, who is more than ten years younger than you, the uniform lifetime table will not be used. To calculate your RMD for that year you will use the ages of you and your spouse at the end of that year to determine a joint life expectancy factor from the IRS's joint and last survivor table. This will be the case even if your spouse dies, or you become divorced and do not change your beneficiary, during that year. The fair market value of a qualifying longevity annuity contract (QLAC) is not included in the adjusted balance for RMD calculations.of