Convert to Roth when RMD required
Taxpayer turns 70 1/2 during 2016. If he converts entire IRA to a Roth in 2016 does the RMD requirement go away? What if he only converts a portion of the IRA to a Roth? Does he base his 2016 RMD on the entire account balance at 12/31/2015?
Permalink Submitted by Alan - IRA critic on Wed, 2016-05-25 15:54
Since 2016 is an RMD year, the entire RMD based on the 12/31/2015 value must be completed prior to converting the rest of the IRA. If taxpayer wanted to avoid RMDs entirely, the full conversion must be done prior to the year the taxpayer will reach 70.5. Note that if taxpayer has two IRA accounts, he can convert one of them after satisfying the RMD for that account only. He does not have to complete the RMD for the other account before converting the remainder of the first account. (Ref IRS Reg 1.408-8 Q 4).