Double RMD required?

[rosskeene]

Terminated participant takes direct rollover distribution from 401(k) plan to IRA in year in which she attains age 70-1/2. Amount rolled over is net after RMD from plan, which is distributed to her in cash. Does she then have to take an RMD from the IRA for the year in which she took the RMD from the plan?

[Lou S.]

There is no RMD required in the IRA.

This assumes there was no IRA balance on the prior 12/31 and all RMDs from the 401(k) were completed (that is if it is the 1st distribution year a 4/1 and 12/31 RMD might have been required in the 401(k)).

[ESOP Guy]

In fact assuming there was no balance in the IRA before the rollover there is no way to compute the RMD.

Simple example:

Person turns 70.5 in 2014. They take a distribution from a 401(k). The RMD is paid and on 7/1/2014 they put money into the IRA. Any 2014 RMD would be computed on the 12/31/2013. The balance as of 12/31/2013 would have been zero.

Even if the IRA has a balance as of 12/31/2013 since the distribution wasn't added until 2014 the new money wouldn't be included in the computation. In that case there would be an RMD but like I said it would be based on the money in the IRA as of 12/31/2013.

[rosskeene]

Thanks for these prompt responses. For furture reference, it looks like the guidance applicable to RMDs in the rollover context is in Treas. Reg. Section 1.401(a)(9)-7.