RMD from an IRA - Multiple Accounts

[Vlad401k]

Let's say a participant has 2 IRAs and needs to take an RMD this year. I know that he can take the RMD from just one of the IRAs (unlike the requirement to take RMDs from each 401k plan). My question is this: can this participant take a direct rollover from one of the IRAs first, before taking the required RMD for the year?

Let's say the participant has $10,000 in each of the IRAs and his RMD for the year is $1,000. Can he rollover $5,000 from one of the IRAs early on in the year and then later take the required RMD of $1,000 from one the IRAs, or must he first take an RMD and only then be allowed to rollover?

[Bird]

I'd say he should be able to do a rollover and the RMD at a later date. The investment company might have its own set of "rules" that say the first money out has to be an RMD but I don't see it as a legal requirement and he should be able to tell them to just do it.

[Belgarath]

From 1.408-8

Q-8. What rules apply in the case of a transfer (including a recharacterization) from one IRA to another?

A-8. (a) General rule. In the case of a trustee-to-trustee transfer from one IRA to another IRA that is not a distribution and rollover, the transfer is not treated as a distribution by the transferor IRA for purposes of section 401(a)(9). Accordingly, the minimum distribution requirement with respect to the transferor IRA must still be satisfied. Except as provided in paragraph (b) of this A-8 for recharacterizations, after the transfer the employee's account balance and the required minimum distribution under the transferee IRA are determined in the same manner as an account balance and required minimum distribution are determined under an IRA receiving a rollover contribution under A-7 of this section.

[Bird]

Belgerath, I'm not sure what your take is on this. I see it saying the RMD must be satisfied but not before the transfer.

[Belgarath]

Yes, I'm agreeing - sorry I didn't specify that - I was just providing the reference. The transfer treatment under Q&A-8 is different than a distribution and subsequent rollover (or rollover attempt) since an actual distribution would fall under Q&A-4 of 1.408-8.