RMD used to fund Roth
Where can I find tax code reference that RMD’s can not be used to fund a Roth IRA conversion? Did not see reference in pub 590.
Where can I find tax code reference that RMD’s can not be used to fund a Roth IRA conversion? Did not see reference in pub 590.
Permalink Submitted by Alan Spross on Mon, 2011-06-27 17:22
Re Pub 590:
1) Page 24 -Required Distributions – “Amounts that must be distributed during a particular year under the required minimum distribution rules are not eligible for rollover treatment”; also p 33.
2) Page 63 – Conversions – “The conversion is treated as a rollover regardless of the conversion method used”
3) Page 29 – Required Distributions – “You cannot convert amounts that must be distributed from your traditional IRA for a particular year under the required distribution rules”
>>>>>>>>>>>>>>>>>>>>>>1/2 by the end of a calendar year convert an amount distributed from a traditional IRA during that year to a Roth IRA before receiving his or her required minimum distribution with respect to the traditional IRA for the year of the conversion?
Copy of IRS Regs 1.408A-4, Q and A #6:
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Q–6. Can an individual who has attained at least age 70
A–6. (a) No. In order to be eligible for a conversion, an amount first must be eligible to be rolled over. Section 408(d)(3) prohibits the rollover of a required minimum distribution. If a minimum distribution is required for a year with respect to an IRA, the first dollars distributed during that year are treated as consisting of the required minimum distribution until an amount equal to the required minimum distribution for that year has been distributed.
(b) As provided in A–1(c) of this section, any amount converted is treated as a distribution from a traditional IRA and a rollover contribution to a Roth IRA and not as a trustee-to-trustee transfer for purposes of section 408 and section 408A. Thus, in a year for which a minimum distribution is required (including the calendar year in which the individual attains age 701/2 ), an individual may not convert the assets of an IRA (or any portion of those assets) to a Roth IRA to the extent that the required minimum distribution for the traditional IRA for the year has not been distributed.
(c) If a required minimum distribution is contributed to a Roth IRA, it is treated as having been distributed, subject to the normal rules under section 408(d)(1) and (2), and then contributed as a regular contribution to a Roth IRA. The amount of the required minimum distribution is not a conversion contribution.
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