Roth Withdrawal and Roth Conversion in Same Year?
74 year old individual takes a Roth withdrawal in May so his son can purchase a home. He also has taken his annual RMD. Can he take traditional IRA funds and convert them to a Roth in December? My assumption is that the Roth Withdrawal early in the year is independent of the Roth conversion which will occur in December. I cannot find anything in the tax regulations where this is prohibited. Any thoughts?
Permalink Submitted by Alan - IRA critic on Mon, 2024-07-22 12:18
It’s not a problem to do the conversion other than the conversion will add to the taxable income for this year.
It is also allowable and preferable if the 60 day rollover period for the Roth distribution has not expired and the person has a rollover available, to roll back the Roth distribution using other funds including the funds available from the RMD. This would not be treated as a disallowed conversion of the RMD, just as a rollover of a Roth distribution. This could either eliminate the need to convert and pay taxes or could reduce the amount of the conversion.