Conversion to Roth IRA
Since H.R. 7327 suspends the 50% penalty for failure to take a required minimum distribution (RMD) for 2009, this effectively means that there is no required distribution. Does this mean that any withdrawals from an IRA (including an amount that does not exceed what would have been the RMD for 2009) are included in the calculation of adjusted gross income for the purpose of determining whether the Taxpayer is eligible to make a conversion to a Roth IRA from a traditional IRA?[/u]
Permalink Submitted by Alan Spross on Wed, 2009-01-21 05:14
This was not specifically addressed in the legislation, therefore we must go by the prior rules which indicate that ONLY RMDs can be excluded. If you therefore take a TIRA distribution in 2009 that is NOT an RMD, it will count in the modified AGI limit toward the 100,000. But if you convert that distribution to a Roth, it will NOT count because conversions also do not count toward the 100,000.
The potential problem is taking TIRA distributions in addition to those that you choose to convert.