Ex-wife receiving share of ex-husband’s IRA
The wife does not work.
Can she convert the IRA proceeds to Roth? Rules?
Thanks
She is not working only receiving alimony. Seems like she would be in10% bracket or less. Thoughts?
Seems like it would be wise to convert to the top of the 10% bracket or to the top of the 12% bracket depending on the projection of what her bracket would be in retirement.
Permalink Submitted by Alan - IRA critic on Mon, 2023-02-13 16:11
Yes, once she receives the “transfer incident to divorce” into her own IRA, she can convert if she chooses to, but as always she should compare the marginal rate paid on the conversion with her future estimated marginal rates in retirement. As long as she is filing single, her marginal rate will be higher than when married in most cases.