72t and Roth IRA convertions

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L1: 72t and Roth IRA convertionsMy SEPP was set up several years ago and I don”t need some of the money that is now being distributed to me. Can I convert the amount I don”t need to a Roth IRA if my AGI is under 100k?2007-11-28 14:16, By: Bob, IP: [12.104.244.6]
L2: 72t and Roth IRA convertionsBob,
No, you cannot convert a 72t distribution because it is not considered an eligible rollover distribution. This is the same reasoning for not being able to convert an RMD to a Roth.
However, you CAN convert the 72t IRA itself to a Roth, and while this sounds very similar to the above, it is very different from just rolling your distributions into a Roth IRA. Your distributions cannot be converted, but the rest of the IRA can. This would use up your extra cash, because you would have conversion taxes to pay in addition to the regular taxes on your 72t distribution. The tax bill in the year of conversion would depend on the timing of the conversion and whether your 72t distributions came out of the TIRA before conversion or the Roth after conversion. This can be a tricky strategy, and I probably opened up a few more questions. So feel free to post them.2007-11-28 16:51, By: Alan S., IP: [24.116.165.60]

L2: 72t and Roth IRA convertionsIf you would like some informed advice or comments, then you must indicate your age (DOB), the date you started your SEPP 72-T, and your cumulative withdrawals to date. If you are now over 59 1/2AND have had the SEPP 72-T for at least 5 years, then you could terminate the SEPP 72-T.2007-11-28 21:12, By: dlzallestaxes, IP: [151.197.162.6]