RMD and the Indirect Rollover rule

[waltxj2]

I recently arranged for a RMD (Required Minimum Distribution) from one of my traditional ire accounts.  Will the fact I took a distribution to fulfill my RMD interfere with my ability to perform an indirect rollover of another IRA which is maturing in January 2019. In other words would I run afoul with the rule of 1 indirect rollover per 12 month period?

I have not done any indirect rollovers in the past 12 months.

[Critter · Accepted solution]

The RMD was a distribution not a roll over of any kind so one has nothing to do with the other ... but why are you doing an indirect roll ?   It is much better to do a trustee to trustee roll. 

[waltxj2]

Trustee to trustee rollovers take 1-2 weeks to complete

[dmertz]

Why does it matter that it takes 1 to 2 weeks to complete the trustee-to-trustee transfer?  (A trustee-to-trustee transfer of an IRA is not rollover, so RMDs are irrelevant to doing a trustee-to-trustee transfer.)

The year in which a rollover is reportable is determined by the date of the distribution from the IRA.

If you do an indirect rollover in 2019, your *2019* RMD will need to be satisfied for this account before the IRA is rolled over.

[Critter]

good point ... the RMD must be taken first.

[waltxj2]

RMD must be taken first before I can do an indirect rollover? Can you point me to the IRS document that states that requirement?

[dmertz]

It's in the Internal Revenue Code, CFR 1.408-8 Q&A-4:  <a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/cfr/text/26/1.408-8">https://www.law.cornell.edu/cfr/text/26/1.408-8</a>

"an amount distributed during a calendar year from an IRA is treated as a required minimum distribution under section 401(a)(9) to the extent that the total required minimum distribution for the year under section 401(a)(9) for that IRA has not been satisfied."

In other words, until the RMD for the year for the particular IRA has been satisfied, distributions from the IRA are RMDs.  RMDs are not eligible for rollover.