Roth Conversions
I know that annual RMD’s from a traditional IRA must be taken before you can do a Roth Conversion. I have taken my RMD’s from my traditional IRA’s for the year.
I also have an inherited IRA not subject to the 10-year rule. Do I need to take the inherited RMD for the year before I can do a Roth conversion from my traditional IRA? Many thanks!!!
Permalink Submitted by Alan - IRA critic on Tue, 2022-06-21 17:58
No, you do not. Your inherited IRA and owned IRAs can be treated as entirely separate accounts that do not affect each other. For example, when you report your conversion from your own IRA, you would not enter the value of your inherited IRA on line 6 of Form 8606. Therefore, you can convert from your own IRA prior to taking your inherited IRA RMD.
Permalink Submitted by bev lolr on Tue, 2022-06-21 18:31
Is it true you cannot do a Roth Conversion from an Inherited IRA?
Permalink Submitted by Alan - IRA critic on Tue, 2022-06-21 18:37
Yes, that is correct – except for spousal beneficiaries, who can convert to either an inherited Roth IRA or their own Roth IRA.
Permalink Submitted by David Toberisky on Sat, 2022-06-25 11:03
I just read the Slott Report’s update on SECURE 2.0 with the differences between the Senate and House versions. It was very helpful, but there was no mention of the proposal to eliminate the so-called “mega back door Roth” conversion from a company’s after-tax 401k, which was a newsworthy item in last year’s version. Is it still part of either the House or Senate version?
Permalink Submitted by Alan - IRA critic on Sat, 2022-06-25 16:11
No. The prior proposed elimination of converting after tax dollars was contained in the BBB Act, which is apparently dead for 2022. Therefore, the recommendation is to take advantage of this feature while it remains available.