Author Topic: RMD question for the tax pros  (Read 1024 times)

PhillyWill

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RMD question for the tax pros
« on: November 08, 2016, 09:34:21 AM »
An acquaintance recently presented me with the following scenario. Let's call this person Bob. Bob has both an IRA and a 401(k). Bob has been told by his accountant that he can satisfy his total RMD by taking funds only from the 401(k). Bob is going to separately calculate the RMDs for his IRA and his 401(k), add the amounts together, and take that sum from the 401(k). After 15min of googling I wasn't able to find any info on this specific question. Many sites offer variations on this phrase quoted from IRS.gov:

"However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans have to be taken separately from each of those plan accounts."
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#5

This makes it pretty clear that a 401(k) RMD can't be taken from an IRA. Can an IRA RMD be taken from a 401(k)?

Thanks!

Catbert

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Re: RMD question for the tax pros
« Reply #1 on: November 08, 2016, 12:07:48 PM »
Bob needs a new accountant.  These RMDs are two separate calculations. 

Now if Bob likes the simplicity of one RMD, he can roll his 401k to an IRA and then figure one RMD.  When I hit RMD age I plan to consider rolling my TSP to an IRA to keep things simple.

terran

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Re: RMD question for the tax pros
« Reply #2 on: November 08, 2016, 12:42:20 PM »
According to http://www.obliviousinvestor.com/how-do-rmds-work-with-multiple-iras/ (among other google sources, but Mike is good people, so I'll link to him) this would be ok if the accounts were multiple IRAs, but not since one of the accounts is a 401k.