Excess Accumulation Penalty

Excess Accumulation Penalty

by Richard C. Wilson & Family Offices Group Association Team

Family Office Definition: Excess Accumulation Penalty

Excess Accumulation Penalty definition:  The excess accumulation penalty is owed to the IRS for any retirement account owner or beneficiary of inherited accounts that fails to take the annual required minimum distribution. The penalty is 50% of the amount that was not distributed.  Ultra-high net worth individuals that do not need the income may consider gifting the RMD to a charity for a charitable deduction to offset the income taxes owed on the distribution.

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