No way to stop required IRA distribution — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

No way to stop required IRA distribution

Get PDF file

by on
in Small Business Tax

Q. Although I still work sporadically as a consultant, I must begin taking distributions from my IRA before April 1 of next year. If I convert to a Roth IRA now, can I avoid the taxable distribution? R.A., Duluth, Minn.

No. Unfortunately, someone who has reached age 70½—and therefore is required to begin taking minimum distributions from a traditional IRA—can’t avoid tax by converting a traditional IRA to a Roth IRA before receiving the required minimum distribution for the year. The required distribution is not eligible for the rollover of funds (Reg. 1.408A-4, Q&A 6).

Tip: Unlike a traditional IRA, you can continue to make contributions to a Roth IRA after attaining age 70½ if you have earned income.

Related Articles...

Leave a Comment


Previous post:

Next post: