One Account to Satisfy the RMD From a Different Account?

Q. Can a distribution from one retirement account be used to satisfy the RMD from a different account?

A. The answer is no for most people and most situations.

Exceptions
However, here are some exceptions -

• If you have multiple traditional noninherited IRAs, a distribution from any one of them can count toward the RMD from any of the other traditional noninherited IRAs.
• Similarly, a distribution from a noninherited 403(b) plan can be used to satisfy the RMD from all of the participant's noninherited 403(b) plans.

You can use this rule to eliminate a small account by taking all of the year's RMDs (for all your applicable accounts) from that one.

Account-specific RMD
Unfortunately, for most people, here is the bad news.  The following accounts must pay their RMDs separately.  For these plans, you must take each plan's or account's RMD from that particular account or plan:

• All qualified plans (e.g., a Keogh plan or 401(k) plan). Even if you have five separate 401(k) plans, each one must pay its own RMD each year. An IRA distribution can never satisfy the RMD requirement for a qualified plan and vice versa.
• Roth IRA distributions do not count toward required distributions from traditional IRAs.
• And vice versa! Attention beneficiaries: A distribution from an inherited traditional IRA does not count toward the RMD from an inherited Roth IRA.
• Distributions from inherited accounts do not count toward the RMD from your own account.
• IRAs inherited from one decedent cannot be aggregated with IRAs inherited from another decedent. The IRAs from each decedent must pay their own RMDs.
• Husband and wife must each take his or her own RMD from his or her own accounts. If one spouse takes more than the RMD, that cannot be used to reduce the other spouse's RMD.