RMD question

Submitted by Michael Eastham on Wed, 2018-06-06 16:31

my client is 70.5 now and subject to RMD. He is still working and wants to contribute to a Roth. I understand that the rules do not allow for an RMD to be put into another qualified account, but if he is going to contribute $6,500 to his Roth, how would he do that without it appearing like he took the money from an RMD and put it into a Roth?
Thanks



Submitted by William Tuttle on Wed, 2018-06-06 17:55

  • A RMD is not eligible for rollover. So it is a taxable withrawal. It does not matter where the money from the Roth IRA contribution comes from. As soon as the RMD is in the clients possension. They can do anything with it they want, including a Roth IRA contribution provided they have the necessary compensation.
  • Just verifying that when you say 70.5 and still working. That you understand that the IRS does not require RMDs from a non-IRA retirment plan of their employer when still working and not a 5% owner. 

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