Question

In order to avoid a penalty for failure to receive a minimum distribution from a defined contribution plan, a taxpayer must take her first minimum distribution for the later of which of the following years? (Check all that apply.)

a) 70^1/2
b) 72
c) 65
d) 59^1/2

Answer 1

Taxpayers must take their first minimum distribution from a defined contribution plan by April 1 following the year they turn 72 to avoid penalties.

Step-by-step explanation:

In order to avoid a penalty for failure to receive a minimum distribution from a defined contribution plan, a taxpayer must take her first minimum distribution by April 1 of the year following the later of the year in which they turn 72 years old or the year in which they retire. Previously, the age was 70½, but this has been updated under the SECURE Act. Therefore, the correct answers would be: b) 72.