RMD mandatory pre- or post- rollover?

[Guest jbergstrom]

I have a client who retired May 2010 and was told by his employer's plan custodian that before rolling over his 401k to his IRA, he must first take his RMD from the 401k, then they would roll the balance to the IRA. That's ridiculous, but I need to find the IRS Code that says it is! I know he'll have to take the plan balance into consideration for his distributions, but it doesn't have to come out before we roll the plan to his 401k.

*He plans on making a contribution to his church with the distribution and we're unable to take it from the 401k, so we figured we'd roll the whole 401k to his IRA then take 'both' distributions from the IRA. (He turns 70-1/2 in Nov. and between his accountant and I we determined it best to take it this year.) Anyone know where I can find the IRC (not Pub 590) that says we don't have to take the RMD before rolling it? Thank you,

[PensionPro]

try A-7 of §1.402©-2

[Guest jbergstrom]

try A-7 of §1.402©-2

PensionPro- thanks for the lead- I read the code. Apparently not so ridiculous after all! And I believe the below paragraph from 1.401 negates the possibility of pushing the distribution into 2012 as well. Appreciate the education- JB

(e.g., when the distribution for the calendar year in which the employee reaches age 701/2 is made on the following April 1), the amount that was required but not distributed is added to the amount required to be distributed for the next calendar year in determining the portion of any distribution in the next calendar year that is a required minimum distribution.

[ETA Consulting LLC]

The first distribution from the qualified plan will be treated as RMD, and therefore not eligible for rollover. You are not going to find anything to make the plan administrator change their position (because they are right).

Good Luck!