RMD
Please explain the rationale of the IRS regulation, if one exists, prohibiting a traditional IRA owner from distributing the annual RMD into a Roth IRA, since taxes on that distribution will still be due. Thank you.
Please explain the rationale of the IRS regulation, if one exists, prohibiting a traditional IRA owner from distributing the annual RMD into a Roth IRA, since taxes on that distribution will still be due. Thank you.
Permalink Submitted by Alan - IRA critic on Sat, 2022-01-08 03:50
A conversion is a two part transaction, firstly a distribution from a traditional IRA and secondly a rollover to a Roth IRA. The tax code clearly does not allow any RMDs to be rolled over, therefore converting or any other type of rollover of an RMD is not allowed. While tax is generally due for conversions, the funds that were no longer slated for tax deferral would remain deferred in a Roth IRA and in addition would themselves no longer be subject to RMDs while generating future tax free gains. As such converting an RMD is contrary to the purposes of the RMD rules.