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Min Req Distributins & Roth rollover
Old 12-18-2009, 01:09 PM   #1
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Min Req Distributins & Roth rollover

As I read the current tax code Min Required Distributions during 2009 are waived. A rollover to a Roth for a taxpayer in the MRD phase of life can only be in excess of the MRD. My read on this is that a taxpayer may rollover the first dollar of IRA distributions to their Roth this year up to the limit of $6,000 (assuming that the household income limits are met and no IRA contributions made)

Any flaw in this analysis
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Old 12-18-2009, 02:56 PM   #2
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Quote:
Originally Posted by Brat View Post
As I read the current tax code Min Required Distributions during 2009 are waived. A rollover to a Roth for a taxpayer in the MRD phase of life can only be in excess of the MRD. My read on this is that a taxpayer may rollover the first dollar of IRA distributions to their Roth this year up to the limit of $6,000 (assuming that the household income limits are met and no IRA contributions made)

Any flaw in this analysis
Yes, you don't need to do a MRD THIS year
Yes, you can do a rollover to a Roth as you can every year
6K limit is for contributions, not rollovers, you can rollover any amount you
want, remember you will be paying taxes on the rollover amount.
TJ
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Old 12-18-2009, 03:43 PM   #3
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Our home is on the market, if we are under contract to purchase it's replacement by April 30 there will be a tax credit. We have the option of filing an extension if there is any uncertainty, and re-characterization of some or all should the purchase not happen by April 30.

Thanks for the heads up on the $6,000. I thought I would need to do a little fancy footwork with our IRAs to balance it out.
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Old 12-18-2009, 07:23 PM   #4
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I think you know this but the 6000 for Roth must come from earned income (like will show on a W2). I do not think pension income counts but others can correct me.
nwsteve
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Old 12-18-2009, 08:51 PM   #5
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Brat
I think you know this but the 6000 for Roth must come from earned income (like will show on a W2). I do not think pension income counts but others can correct me.
nwsteve
contributions yes, rollovers no
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Old 12-19-2009, 03:55 PM   #6
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Whether or not a retiree hopes to use a tax credit, this year is an outstanding opportunity for those in the MRD status to rollover $ to a Roth because you can roll from the first $, not the excess of the MRD amount. For those of us with existing Roths the waiting period is not an issue.
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