RMD Before ROTH conversion-multiple accounts
A taxpayer has four separate TIRAs and is required to take RMDs for 2011. Taxpayer wants to convert one account to ROTH now. Can RMD calculated for that account only be taken from that account (or another) while waiting to take remainder of RMD later in the year from the other accounts, or must the entire aggregrate RMD for 2011amount be withdrawn from one or more accounts prior to converting the one account to ROTH? For example, 4 TIRAs each have RMD of $5,000 for total RMD of $20,000. Can $5,000 RMD be withdrawn from IRA #1, with balance being converted to ROTH, or must the entire $20,000 RMD be withdrawn (from one or more TIRAs) prior to converting IRA #1 to ROTH?
Permalink Submitted by Alan Spross on Wed, 2012-01-04 23:26
Do you mean the RMD for 2011 has not been taken, or did you mean the 2012 RMD is what you are concerned about?
If it WAS for 2011 and taxpayer wants to have the penalty waived as well as converting any amount in 2012, then they need to take both years RMD amounts before converting any additional amounts in 2012.
The RMDs for 2011 and 2012 can be taken in any combination from the current accounts, but the total RMDs must be completed before converting any amount. For purposes of these rules, all the IRA accounts are considered as if combined into a single account.
This situation is very similar to the post titled ” Roth Conversion when turning 70.5″, so you might read that thread as well.
Permalink Submitted by Alan Miller on Thu, 2012-01-05 01:18
I did mean to ask about the 2012 RMDs…. Thanks for the info.