In-Plan Roth Conversion Counts Toward the RMD?
A participant in a 401(k) plan, a greater than 5% owner who is still employed and is required to take an RMD, would like his RMD to remain in the 401(k) plan by simply converting his profit sharing source to a Roth source. The logic goes, since the in-plan Roth conversion is considered a distribution, can the distribution simply be moved into a Roth conversion source within the plan?
I know this can’t be done with IRAs from RMDs but can it be done here?
Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2017-01-23 23:14
No, the same situation applies here as for Roth IRA conversions. An IRR is treated as a distribution and must be an eligible rollover distribution in order to be contributed to the designated Roth. Sec 402(c)(4) indicates that an RMD is not eligible for rollover.