Question 1

A taxpayer has a traditional 401(k) balance of $2,000,000. They turn 73 in Year 1. The Uniform Lifetime Table factor for age 73 is 26.5. What is the Required Minimum Distribution (RMD) for Year 1?

Accepted Answer

1. Identify Account Balance: $2,000,000 (as of prior year end).
2. Identify Factor: 26.5.
3. Calculate: $2,000,000 / 26.5.
4. Result: $75,471.69 -> Round to $75,472.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Multiplying by a percentage instead of dividing by the factor.

A taxpayer has a traditional 401(k) balance of $2,000,000. They turn 73 in Year 1. The Uniform Lifetime Table factor for age 73 is 26.5. What is the Required Minimum Distribution (RMD) for Year 1?

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