Ah, good point about the RMD for the 401(k). Her separation from service in 2017 *does* make 2017 the first year for which she is required to have taken an RMD from the 401(k). If the cashing out of this 401(k) was her only distribution from the 401(k) in 2017, some small portion of the distribution, probably between 4% and 5% (the actual amount depends on the 401(k) 2016 year-end balance and her age on her birthday in 2017), would represent her RMD that was not eligible for rollover. All amounts distributed from the 401(k) in an RMD year are RMD until the RMD is satisfied and RMDs are not eligible for rollover (even distributions made prior to separation later in the year).
