Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Question re RMDs and Roth Conversions
Old 02-24-2017, 10:21 AM   #1
Full time employment: Posting here.
misanman's Avatar
 
Join Date: Apr 2008
Posts: 722
Question re RMDs and Roth Conversions

For those of us who are subject to RMDs, it has been my understanding that the IRS required that the RMD be satisfied first before a Roth conversion could take place.

I went through quite a bit of effort to ensure that we followed the "rules" last year with respect to DW's tIRA, but as I was working through this years income tax (using TurboTax) I didn't notice anything that addressed the specific timing of tIRA distributions (either RMD or Roth conversion).

So does it really matter the order in which they occur? Or could we have done a Roth conversion first followed by a distribution to satisfy the RMD?

Maybe I just missed it
__________________

__________________
"Don't you draw the queen of diamonds, boy, she'll beat you if she's able.
You know the queen of hearts is always your best bet" -- The Eagles, Desperado
misanman is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-24-2017, 10:26 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,967
Quote:
Originally Posted by misanman View Post
For those of us who are subject to RMDs, it has been my understanding that the IRS required that the RMD be satisfied first before a Roth conversion could take place.

I went through quite a bit of effort to ensure that we followed the "rules" last year with respect to DW's tIRA, but as I was working through this years income tax (using TurboTax) I didn't notice anything that addressed the specific timing of tIRA distributions (either RMD or Roth conversion).

So does it really matter the order in which they occur? Or could we have done a Roth conversion first followed by a distribution to satisfy the RMD?

Maybe I just missed it
Fidelity requires that the RMD be completed before any conversions are made.

Ha
__________________

haha is offline   Reply With Quote
Old 02-24-2017, 10:29 AM   #3
Full time employment: Posting here.
 
Join Date: Apr 2014
Location: Houston
Posts: 656
Interesting question I never thought about. Looks like the following info supports Ha's comment....need to take RMDs out before making Roth converion.

Roth Conversion: Take Your Required Minimum Distribution Out First | FiGuide
Whisper66 is offline   Reply With Quote
Old 02-24-2017, 10:45 AM   #4
Full time employment: Posting here.
misanman's Avatar
 
Join Date: Apr 2008
Posts: 722
Okay, so it seems that the ordering rule is enforced by the organization that holds the account (Fidelity in my case) rather than at tax return time.

Our case was a little complicated as early in 2016 we did RMD followed by a Roth conversion but then, at tax time, we realized that we had some unexpected 2015 income which required that a 2015 Roth conversion be re-characterized to stay with acceptable tax brackets. That re-characterization changed the end-of-year balance and thus the 2016 RMD amount. Since we had already withdrawn the lower RMD amount and then performed the Roth conversion we would have been in violation. I don't know whether Fidelity would have caught this or not.
misanman is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Inherited IRA and turbo tax question on RMDs DFW_M5 FIRE and Money 12 02-08-2016 07:26 AM
Tax on Roth Conversions vs Tax on RMDs medelste FIRE and Money 44 07-27-2015 08:27 AM
Roth IRA RMDs, what! veremchuka FIRE and Money 11 11-24-2013 07:17 AM
Possible to receive both SS payments and RMDs and have Fedl bracket <25%? haha FIRE and Money 10 03-12-2013 11:22 AM

» Quick Links

 
All times are GMT -6. The time now is 02:42 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×