Roth Conversions and Inherited Roth IRA RMDs: Today’s Slott Report Mailbag

Thursday, August 31, 2023

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

Question:

Hello,

If you do a Roth conversion from an IRA, does that qualify as your required minimum distribution (RMD) for the year? Or is it separate and apart from the RMD?

Thank you,

Arthur

Answer:

Hi Arthur,

You must always take your RMD first before doing a Roth conversion in a year when RMDs are required. That’s because the first dollars out of the IRA in an RMD year are considered to be your RMD. The RMD cannot be rolled over or converted. However, once the RMD is taken from the IRA, any remaining portion can be rolled over or converted.

Question:

Does a Roth IRA nonspouse (grandson) beneficiary have to take yearly RMDs, or he can take the entire distribution in the tenth year? Thank you for your help with this.

Asha

Answer:

Hi Asha,

Roth IRA beneficiaries who are subject to the 10-year payment rule are never required to take annual RMDs in years 1-9 of the 10-year period. Only beneficiaries of IRA owners who died on or after their RMD required beginning date must receive the annual RMDs. Since Roth IRA owners don’t have to take lifetime RMDs, they are always considered to have died before their required beginning date. Therefore, the entire amount can be withdrawn in the tenth year.

 

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