Pre-Secure Act Bene IRA – 2024 RMD/Roth Conversion
We have a client that inherited his mother’s IRA in 2017, he is asking about using his 2024 “RMD” to make a roth conversion? I am not sure that it is possible since everything I am reading says an RMD can’t be converted. But maybe because there is some different rules this year with RMDs and/or because it is an Inherited IRA there is a work around. The client also asked for any reference to an IRS publication if it is determined that it cannot be done.
Permalink Submitted by Alan - IRA critic on Thu, 2024-11-21 13:58
RMDs can never be rolled over whether from an owned account or an inherited account, and there are no changes. A rollover of an RMD would defeat the entire purpose of the RMD rules. Even if this were not an RMD a distribution to a non spouse beneficiary can never be rolled over and a conversion is a rollover. This is the basis for the rule that an inherited IRA non spouse beneficiary cannot convert the inherited IRA.
Per Pub 590 A, p 24: “Required Distributions”” Amounts that must be distributed during a particular year under the required distribution rules aren’t eligible for rollover treatment.”
Therefore, both the RMD and any conversion done must be included in taxable income. However, client could use the RMD money to pay the taxes on a conversion from his own IRA if he has one.