RMD to Roth?
Greetings!
I have a client that has both Traditional and Roth IRA accounts; he approaching the time-of-life where he will be in RMD land. Since his marginal tax rate is lower with the tax cuts, he’s considering converting some of his IRA funds to Roth accounts.
Since he has no W-2 income, the question came up about his RMDs and he wants to know if he could convert the RMD to a Roth. What is the process to do this, if any? Are there any
Permalink Submitted by David Mertz on Mon, 2018-09-17 21:02
A Roth conversion involves a taxable rollover from the traditional IRA to the Roth IRA. Since an RMD is not eligible for rollover, the RMD cannot be converted to a Roth IRA. The RMD for the year for a traditional IRA must be completed before converting any other amounts from that traditional IRA to a Roth IRA in that year. To minimize RMDs, one should consider doing Roth conversions in the years before the first year for which RMDs must be taken from the traditional IRA.