RMD 401k rollover to IRA

[vegasbillea]

First, I want to wish everyone a very Merry Christmas and a happy and enjoyable holiday.
Now the issue- Client call yesterday wanting to know why he must take RMD twice on the same dollars.
In 2022 ( all activity occurred in 2022), Client opened up a Trad, IRA to move his 401K account into the new established IRA. Before moving the 401K He had the RMD taken out first and rolled over the balance into the IRA, this was done in June 2022. In Nov. the brokerage house that housed the IRA where the 401k transfered into advised the Client he must take the RMD out of the IRA before year end. Client told the brokerage house that he already took the RMD before transferring the 401k into the IRA. Brokerage house stated he must take another RMD from the IRA because it is an IRA.
The brokerage house told him that is the tax law. Client wanted to know if this is true and he must once again take the RMD twice on the same dollars. The question is must he take the RMD again since he already took it before he transfer the 401k account? I believe he does not, but traying to find more information.
I have reviewed the pub and FAQ concerning the rollover, but found nothing that match this situation. Any thoughts and response would be helpful.

[TaxGuyBill]

I suspect the broker agent is clueless.

Isn't the 2022 RMD based on account balance for December 31st, 2021? So if the December 31st, 2021 balance was $, there the RMD would be $0.

https://www.irs.gov/publications/p590b#en_US_2021_publink100090061

Maybe your client can bring this information to the broker and ask for clarification.

[Rapid Robert]

"Brokerage house stated he must take another RMD from the IRA because it is an IRA."

In addition to what TBG said, it is not the broker's place to enforce this. They can provide advice and then they should shut up.

[vegasbillea]

Thank all of you for your responses. Yes, I informed the client t the brokerage house was wrong and reviewed with him how the RMD is calculated.
I want to wish all of you a very Merry Christmas and a happy/blessed new year.

[terryats]

I believe the broker may be correct. Client took RMD from 401 plan. client took RMD from IRA. Two separate transactions. IRS rules say you must figure RMD from IRA and 401 separately. This is from FAQ from IRS:

An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) contract owner must calculate the RMD separately for each 403(b) contract that he or she owns, but can take the total amount from one or more of the 403(b) contracts.

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. I think I would contact IRS to clarify being it was the same money, but technically it seems broker is correct.

[terryats]

Was rethinking, and believe broker was wrong as, at the end of year he only had one retirement account.

[vegasbillea]

Thank you Terryants for your response. I'm in agreement with you that the Brokerage house was wrong and only issued the notice and letter to client to protect themselves in case there was a fallout

[Anarchrist]

Tell the client to ask the brokerage house to figure his 2022 RMD for the IRA.

[vegasbillea]

Anarchrist, would you believe I just did that when discussing the situation with the Client, I advised him to have the brokerage house to calculate the RMD. He is still waiting for their response.
Wishing you a very Merry Christmas and happy holidays.
Thank you for your response.