IRA TO ROTH IRA
I AM 71 WILL BE 72 IN 2022 AND HAVE TO TAKE RMD. I have large IRA and do not need that money for my life style. how to decide to convert some or all to ROTH IRA or plan CHARITABLE gift at death to pass remaining to grand children
I AM 71 WILL BE 72 IN 2022 AND HAVE TO TAKE RMD. I have large IRA and do not need that money for my life style. how to decide to convert some or all to ROTH IRA or plan CHARITABLE gift at death to pass remaining to grand children
Permalink Submitted by Alan - IRA critic on Sat, 2021-04-03 16:39
If conversion will be beneficial, you would convert this year because starting in 2022 you will have to complete your RMD before converting any additional amounts. Therefore, your taxable income starting in 2020 will include both your RMD and the conversion and will probably spike your marginal tax rate. This is the last year you can convert without having RMD income in addition. You can also do QCDs and a QCD in 2020 is treated as part of your RMD and is not taxable. Of course, a QCD must be made to a public charity, not to a person, donor advised fund, or private foundation. As you indicated you could also check into leaving your IRA to a CRT. Remember, unless disabled your grandchildren will only have 10 years to distribute the inherited IRA under the Secure Act, whereas a CRT can replicate the old stretch. Following is an article by forum poster Bruce Steiner regarding CRTs as IRA beneficiaries and the tradeoffs. Note the grandchild must be at least 27 for a CRT to qualify.
Charitable_remainder_trusts_replicate_the_stretch_-_Trusts__Estates_4_2020.pdf (kkwc.com)