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72t distribution change & roth conversion

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ByBob

L1: 72t distribution change & roth conversionI am 58 and have been receiving SEPP using the annuitization method for the past five years.The IRS allows a change to RMD. this will enable my AGI to drop below $100000 and allow me to convert some of my IRA to a Roth. I have very high itemized ded. for the next few years and would like to balance the conversion tax against this.My questions concern the following. First can I do this? Second I have taked my first quarter distribution but this would equal my annual distrib.if I switched to the RMD method.Can I do this? Third will I run afoul of the established balance if I convert part of this account to a Roth?2004-04-12 10:23, By: bob, IP: [63.233.151.201]
L2: 72t distribution change & roth conversionHello Bob:
My first reaction is NO. I think the IRS will treat a regular-to-Roth conversion as an additional “disallowed” distribution. That being said, I have to admit that I am not 100% sure. As an example, regular IRAs are governed by 408(a); Roths are governed by 408A; right next door.Both are treated commonly as “retirement plans”; therefore, an alternate interpretation is that moving monies from a regular IRA is the same as (or sufficiently similar to) a rollover; however, this type of rollover happens tocreate a taxable event.
TheBadger
wjstecker@wispertel.net
2004-04-12 10:48, By: TheBadger, IP: [38.116.134.130]

L3: 72t distribution change & roth conversionBadger,
If I not only pay the conversion tax but continue the distribution under the new RMD schedule and pay tax on this until 591/2 am I still out of luck? As and alternative can I simply change to the Rmd schedule for my IRAand convert my wife’s IRA to a Roth?2004-04-12 11:09, By: bob, IP: [63.233.151.201]

L3: 72t distribution change & roth conversionIf I not only pay the conversion tax but continue the distribution under the new RMD schedule and pay tax on this until 591/2 am I still out of luck?

This is where I am uncertain; I don’t think the question has ever been asked. The only way I know of to get a definitive answer is to file for a PLR.
As and alternative can I simply change to the Rmd schedule for my IRA and convert my wife’s IRA to a Roth?
Absolutely Yes.
TheBadger
wjstecker@wispertel.net
2004-04-12 11:46, By: TheBadger, IP: [38.116.134.130]

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