RMD and 60 day rollovers

Apparently you missed that small part of Pub 590 which INCLUDES any outstanding (not in any account) rollovers as being ADDED to the IRA account balance as of 12/31/xx. Sorry, nice try.

Ummm. It's tax fraud?

You cannot roll over a RMD which is what you would be attempting to do every year after age 70.5

What's wrong is you missed the following in the publication cited above. You are right in thinking that it should not be possible to completely circumvent the RMD's using 60 day rollovers: Under the subject heading of "Figuring the Owner's Required Minimum Distributrion, it states that you should "figure your required minimum distribution for each year by dividing the IRA account balance (defined next) as of the close of business on December 31 of the preceding year by the applicable ... life expectancy." Then "IRA account balance" is defined as "The IRA account is the amount in the IRA at the end of the year preceding the year for which the required minimum distribution is being figured. Continuing as a subsection is one entitled "Outstanding rollovers and recharacterizations" which states that "The IRA account balance is adjusted by outstanding rollovers ... that are not in any account at the end of the preceding year." It continues, "For a rollover from a qualified plan or another IRA that was not in any account at the end of the preceding year, increase the account balance of the receiving IRA by the rollover amount valued as of the date of receipt." That requirement forces you to have to take a RMD even though you had no official IRA balance as of December 31st.

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I thought about this after too much egg nog a few years ago. From your referenced link

Figuring the Owner's Required Minimum Distribution Outstanding rollovers and recharacterizations. The IRA account balance is adjusted by outstanding rollovers and recharacterizations of Roth IRA conversions that are not in any account at the end of the preceding year. This appears about 2/3 down, and is easily found by doing a 'find' within your browser for "figuring the owner" Nice try, though. JOE

It is prohibited see IRS Reg 1.408-2

See Rev. Rul. 82-153" Based on 1.408-2 of the regulations, the required distributions from the account of a person who has had a rollover into an IRA after attaining age 70 1/2 are computed as follows. The initial distribution, for the year of the rollover, must be at least equal to the lesser of: (1) the balance in the account, or (2) the entire amount rolled over, divided by the individual's life expectancy at age 70, reduced by one for each taxable year commencing after the individual's attainment of age 70 1/2. The same computation method is followed in subsequent taxable years, except that the numerator to be used after the year of the rollover is the account balance (including any accumulations) in the IRA, determined at the beginning of the taxable year, rather than the "entire amount rolled over."

Once you attain the age requiring RMDs, the law states that you can not rollover your RMD. The law also states that your account balance gets adjusted for any rollovers or recharacterizations not in any account at 12/31.

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I am not an authority on rollovers but I believe there is a basic flaw in your reasoning. If I am not mistaken, you must include any rollovers in transit in the IRA balance for determining the RMD. Thus, you gain nothing by this maneuver except for the hassles and possible fees. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans