Early Retirement & Financial Independence Community

Early Retirement & Financial Independence Community (https://www.early-retirement.org/forums/)
-   FIRE and Money (https://www.early-retirement.org/forums/f28/)
-   -   Min Req Distributins & Roth rollover (https://www.early-retirement.org/forums/f28/min-req-distributins-and-roth-rollover-47779.html)

Brat 12-18-2009 01:09 PM

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???

teejayevans 12-18-2009 02:56 PM

Quote:

Originally Posted by Brat (Post 885167)
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

Brat 12-18-2009 03:43 PM

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.

nwsteve 12-18-2009 07:23 PM

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

teejayevans 12-18-2009 08:51 PM

Quote:

Originally Posted by nwsteve (Post 885338)
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

Brat 12-19-2009 03:55 PM

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.


All times are GMT -6. The time now is 01:45 PM.

Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.