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RMD from a Traditional IRA


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3 replies to this topic

#1 Annette Leerhoff

Annette Leerhoff

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Posted 01 September 2011 - 09:01 AM

Is a required minimum distribution (RMD) from a traditional IRA permitted to be transferred to a personal Roth IRA? The IRS has a list of FAQs regarding RMDs and question 12 is "Can RMD amounts be rolled over into another tax-deferred account?" The answer is no. However, from my reading Roth IRAs are identified as a tax-exempt vehicle and not as a tax deferred account.

Any thoughts? If you can provide a particular tax code section that would be great.

#2 GMK

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Posted 01 September 2011 - 09:56 AM

RMD's are not eligible to be rolled over, not even to a Roth IRA.

Here's a good summary of the main RMD rules:

http://www.investope...p#axzz1WiC0E8yl

#3 ETA Consulting LLC

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Posted 01 September 2011 - 10:04 AM

However, from my reading Roth IRAs are identified as a tax-exempt vehicle and not as a tax deferred account.


I like the way you think :)

Just to ensure you don't get caught up in semantics when reading the technical stuff, the taxes in a Roth IRA are deferred until the time they become exempt. This becomes a reality when you take a distribution that includes earnings that do not meet the conditions for being a qualifying distribution.

A good way of looking at it is: "tax deferred" would be a fruit where "tax exempt" would be an apple. An apple is a fruit, but a fruit isn't necessarily an apple. I'm trying the analogy thing, hope it works.

Good Luck!
CPC, QPA, QKA, TGPC, ERPA

#4 masteff

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Posted 01 September 2011 - 10:10 AM

IRS Code Section 402©(4)(B). 402© as a whole is a requirement of 408A(e).

Edited by masteff, 01 September 2011 - 10:10 AM.

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