ROTH FOR 70 1/2 OVER 100K

[Guest Fortemps]

THERE WAS A HEARING 12/10 ON PROPOSED REG WHICH WOULD PROHIBIT DEFERRING MIN DISTRIBUTION UNTIL 99 TO AVOID EXCEEDING 100K AGI IN 70 1/2 YEAR. WHAT WAS THE OUTCOME OF THE HEARING

[Guest tinglis]

I spoke to the attorney at IRS regarding Roth conversions for individuals reaching age 70.5 in 1998. She indicated that they have not yet deliberated on revisions to the proposed reg issues/comment letters/comments at the hearing, thus she had no guidance regarding the ability to take the RMD in 1999 and do a conversion in 1998.

She also said that at the 12/10 hearing on the proposed regs that there were, as I recall, 4 speakers. But none of them raised the issue about the regs calling for the first dollars out of the regular IRA to be considered to consist of the RMD, even though the funds are transferred or rolled over to a Roth IRA.

[BPickerCPA]

Although no one at the 12/10 hearing spoke on the age 70½ question, there are at least two comment letters on file on this issue, one of which I wrote.

The only suggestion I can make at this time, if you are optimistic of a change forthcoming, is to do the conversion, take the RMD in the beginning of '99, file for extensions, and be prepared to do a recharacterization if no change is made by 10/15/99. Alternatively, you can litigate.