Roth conversion and RMD timing?
my old understanding is that the RMD is supposed to take place before a roth conversion can be done, is that still true?
2nd question is how is that kept track of? does the 5498 report the date of the roth conversion and also the date the rmd distributions? The 1099-R doesn’t typically show the date of the distributions through out the year.
Suppose someone doesn’t need the RMD, so they generally take it out at the end of the year, but due to the market being down so far this year, they want to proceed with doing a roth conversion now. Can they do that?
So long as the RMD is taken in full (not eligible for conversion of course) in the tax year and the additional distribution then goes to the roth, can it all just be in the same tax year or does the RMD really / physically need to be out of the IRA before the conversion can be done. If so how is that confirmed – do the 5498’s actually report the date of the transactions?
this gets difficult to implement…. different scenario but say someones RMD is $30,000 and they are taking $2,500/mo to live off of, so by year end they have met the RMD. Does that mean they can never do a roth conversion until the last month of the year, or they have to adjust their distributions to get the RMD out of the way earlier vs. the steady income of $2,500/mo.
Permalink Submitted by Alan - IRA critic on Fri, 2022-07-08 23:12