RMD/Roth Conversion
Hello, I have a client how processed a Roth conversion on 4/18/19. The client processed the conversion before their entire RMD was met. The client still has outstanding on their RMD. I was under the impression the RMD must be satisfied before any Roth conversions can take place. Can we confirm if that is true? If that is true how should my client go about satisfying the remainder of the client RMD?
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2019-06-06 18:09
The RMD for the particular IRA account that funded the conversion must be done before the conversion. Therefore, if more than one non Roth IRA account is involved, the problem might be smaller. The amount converted prior to the RMD for the particular account is treated as part of the RMD but also as an excess regular Roth IRA contribution that must be removed with allocated earnings. Any earnings will be taxable. So this will not be costly, but it is a hassle to report because the 1099R and 5498 forms will not match up correctly and the return reporting this will need to be explained to the IRS.