RMD
Is there a possibility that RMD will not be required in 2008 due to mkt
declines?
and
how many years do you get to pay the taxes if your convert an IRA to a Roth?
Is there a possibility that RMD will not be required in 2008 due to mkt
declines?
and
how many years do you get to pay the taxes if your convert an IRA to a Roth?
Permalink Submitted by Alan Spross on Wed, 2008-11-12 23:55
1) Always a possibility, but currently just in discussion phase, no specific legislation even marked up yet.
2) Taxes must be paid by the following April when the tax return is due. There is an exception to this for conversions done in 2010. For conversions done that year ONLY, the tax can either be paid as usual, or half the tax can be paid with the 2011 return and half with the 2012.
Permalink Submitted by Al Fry on Thu, 2008-11-13 22:41
An Advisor brought up a good point yesterday, as a rebuttal against repealing RMDs. Assuming the owner does not need the money, why not take the larger % of IRA account value distribution from the IRA (possibly in-kind), pay tax on it and re-invest in long-term growth assets that would be mostly tax deferred, and may get a step-up in cost basis at death? I could not argue with that approach, either. A good article in Tuesday’s USA Today by Sandra Block (quoting Ed). She was suggesting to not be in too big of a hurry to take RMDs, because of the possible congressional action. She also quoted Ed as this is a great opportunity for Roth conversions.