Roth Conversion Question

[bzorc]

Taxpayer is getting ready to take 2010 MRD from Retirement Plan/IRA. Question is if the taxpayer decides to convert a portion of the IRA to a Roth, does the conversion satisfy the 2010 MRD requirement? I looked through the questions and do not see this addressed. Thanks for any replies.

[Bird]

I say no, it's not a distribution. I think the law uses the term "distribution" but even if you take that literally, it's not eligible for rollover back in. An all-Roth account would have to physically remove money from the plan just like any other account.

[bzorc]

I think I might have misaddressed the question. What the question is if the taxpayer is going to take a portion of a traditional IRA and convert it to a Roth, they will pay taxes. Does the conversion distribution, which is subject to tax, also count towards the MRD requirement for 2010?

Thanks again.

[GMK]

This article:

http://www.investopedia.com/articles/retir...94602&close

(see Ineligible Conversions section)

indicates that a Roth coversion is "technically a distribution and a rollover contribution," and since an RMD cannot be rolled over, it cannot be rolled over or converted to a Roth. Gotta take the distribution and put it in a Roth IRA, subject to contribution limits.

[Guest Sieve]

Yes, it will count toward the MRD, but the portion which is the MRD cannot be converted (i.e., rolled over) to the Roth IRA. (IRC Sections 408A(d)(3)(B) & 408A(e) & 402©(4).)