You are absolutely correct. Your broker gave you incorrect advice. IRS rules are very clear. You are not allowed to combine IRA and 401(k) account balances for the purpose of determining your required minimum distribution (RMD). You are allowed to combine RMDs from separate IRAs, however, and take a distribution from one or any combination of IRA accounts. Some people erroneously think that this also applies to combining IRAs and 401(k)s, but it does not. So, the answer to your first question is, yes, you must take a distribution from your IRA, as well as the one taken from your 401(k). As for your second question, we recommend that you hire a CPA or other qualified tax adviser (e.g., an enrolled agent) to assist you in determining the proper RMD from your IRA. The adviser will know how to contact the IRS and what form to use to report the late withdrawal. Otherwise, you can contact the IRS yourself on their toll free number 1-800-829-1040. Explain your situation and request advice about a solution. If you can prove that you were given bad advice by your broker, the IRS may be willing to waive the penalties associated with the late IRA RMD withdrawal. We would like your feedback on this Personal Finance Frequently Asked Question.

Browse related Faqs by tag: personal finance, retirementplanning, incometaxes, personalfinance