Timing of RMD and Roth Conversion

Submitted by Mitchell Glazier on Thu, 2021-08-05 14:48

I want to take my RMD & do a Roth Conversion in 2021. As part of my RMD I want to use a portion to make charitable contributions. Assume my total RMD across all my retirement accounts is $50k. I will plan to take $40k as an ordinary withdrawal and make $10k in charitable contributions going directly from my IRA to the non profit charity. My question relates to the timing of the RMD. Do I have to make the charitable contribution from my RMD before I can do the Roth conversion? I am doing the RMD and Charitable contribution from one account and making the Roth Conversion from a separate IRA but the RMD is calculated for all my IRA accounts. Thank you for your assistance.



Submitted by Alan - IRA critic on Thu, 2021-08-05 15:29

In your specific situation, you must complete your entire RMD and QCD of 50k before converting from either account, same as if you only had a single IRA, assumng that you want your QCD to offset RMD taxable income. However, there is a way to convert before completing your entire RMD if you set up your account balances correctly. The IRS rule is that the RMD for a specific account must be completed before you can do a rollover from that account, and a conversion is a rollover. So if the RMD for your first account was 40k, you could complete that RMD and QCD, and then convert from that same account. You could then complete the 10k left of your RMD from the other account much later in the year. This satisfies both the RMD aggregation rules and rollover restrictions if you want to go to the hassle of converting earlier in the year before you complete your total RMD. But you must complete the RMD for the specific account you wish to convert from before converting from that account.

Submitted by Art Kane on Wed, 2021-08-11 00:21

While doing a Roth conversion, I took the  current years RMD from several pieces of my retirement account (403B). the balance was converted to Roth Ira, is the balance that was converted in March 2021, now in the Roth IRA taxable for 2021 ? Converted funds went into the Roth that has been in existence for more than 5 years.

Submitted by Alan - IRA critic on Wed, 2021-08-11 00:33

Yes, the balance you converted to your Roth IRA is taxable in 2021 except to the extent there were after tax dollars in the 403b. Most 403b plans do not have after tax dollars included in the balance. It does not matter whether the conversion was into your first Roth IRA or there was already a balance in the Roth IRA over 5 years. 

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