November 2010
Problem of the Month

IRA RMD Problem

At age 70 1/2, you are required to take a Required Minimum Distribution (RMD) from your I.R.A. account.   A friend of Mr. P's received from his bank a letter and a check for $751.44 for his RMD.

The letter stated that the bank automatically withholds 10% for Federal Income Tax Withholding.

So, how much was actually taken out of his I.R.A. account?

Solution to the Problem:

The answer is $834.93.
Let x = actual RMD before taxes.
Then x - .10x = 751.44
.9x = 751.44
x = 834.93.

Correctly solved by:

1. Steven R. Muller	Clearbrook, Virginia
2. John Funk	Ventura, California
3. Jacob Harmon	Mountain View High School, Mountain View, Wyoming
4. Dylan Martin	Mountain View High School, Mountain View, Wyoming
5. Levi Harmon	Mountain View High School, Mountain View, Wyoming

Send any comments or questions to: David Pleacher