Timing of Roth conversion
Client is subject to an RMD but wants to do a conversion first. I know the rules state that the RMD must be satisfied before doing a Roth, but does it truly matter if they are both completed by the end of the year which happens first?
Permalink Submitted by Alan - IRA critic on Mon, 2024-10-21 10:58
Yes, because the first distribution of the year (and a conversion is a distribution) is by law treated as the RMD, and the amount of the RMD is not eligible for rollover as a conversion is a rollover. That would create an excess contribution to the Roth IRA which must be corrected.
If client owns more than one IRA, the RMD for all of them must be completed prior to converting from any of them.