RMD WAIVER AND ROTH CONVERSION RECHRACTERIZATIONS: TODAY’S SLOTT REPORT MAILBAG

Thursday, November 19, 2020

By Ian Berger, JD
IRA Analyst
Follow Us on Twitter: @theslottreport

Question:

Good Morning,

We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year?

Thank you,

Linda

Answer:

Hi Linda,

Yes, the CARES Act waiver of RMDs otherwise required for 2020 applies to beneficiaries.

Question:

If I convert today, do I have 1 year from today’s date to recharacterize? Or do I have until the end of calendar year 2021?

Warmly,

Greg

Answer:

Hi Greg,

Unfortunately, Roth conversions can no longer be recharacterized. That change was made by the Tax Cuts and Jobs Act of 2017. By contrast, Roth IRA contributions can still be recharacterized.

 

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