converting to a Roth to satisfy RMD
Hi. Can a client convert to a Roth IRA from a Traditional IRA to satisfy RMD?
- No. A Roth conversion is a rollover and an RMD can never be rolled over. In an RMD distribution year, the RMD must be distributed first. Then if the client still wants to do a Roth conversion they can, but both the RMD and the conversion will be taxable.
- If a client makes a mistake and does a Roth conversion first in an RMD year, the RMD is considered satisfied (if conversion at least equals the RMD amount). However, since it was not eligible for rollover it must be treated as an excess Roth IRA contribution.
Permalink Submitted by David Mertz on Mon, 2017-11-06 16:17
No. A Roth conversion is considered to be a rollover and RMDs are not eligible for rollover. The Traditional IRA’s RMD must be satisfied before converting to Roth any remaining amounts in the Traditional IRA.