RMD from Roth conversion
If the participant is over 70 1/2 and already taking distributions from an IRA, does a Roth conversion mean the distributions can be stopped?
If the participant is over 70 1/2 and already taking distributions from an IRA, does a Roth conversion mean the distributions can be stopped?
Permalink Submitted by Alan Spross on Mon, 2009-12-14 22:48
Amounts that are converted to a Roth IRA will no longer be subject to RMDs. However, in the actual year of conversion, the RMD must be taken out first and that RMD cannot be converted to a Roth IRA. RMDs were waived for 2009, therefore 2009 conversions could be done without concern for the RMD, and the reduced TIRA value as of 12/31/09 will reduce the 2010 RMD or for a total conversion would eliminate it.
In 2010, the RMD will have to be distributed first, prior to the conversion even though the conversion will not be reported until 2011 and 2012. But again, the conversion itself in 2010 will reduce the year end 2010 balance which will in turn reduce the 2011 RMD.
Note that both RMDs and Roth conversions that are included in income may result in more of your SS income being subject to tax in the conversion year. But reduced RMDs in future years may shield future year SS income from becoming taxable.