IRA RMD IRS rule question

[bigliitlerock80]

When calculating your Traditional IRA RMD when the time comes, I understand any Traditional IRA money converted to Roth IRA is taxed on the year the conversion took place and is subject to no further taxation.



At the bottom of, https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf, it says "You must increase your IRA balance by any outstanding rollover and recharacterized Roth IRA conversions that were not in any traditional IRA on December 31 of the previous year."

I'm trying to understand what IRS is saying on that line, and I want to make sure that line has nothing to do with Trad IRA conversion to Roth IRA as long as no re-characterization took place. Anyone care to clarify?

 

[FlyingRon]

This has nothing whatsoever to do with the tax nature of the Roth, really. By the way your statement is wrong. Your contributions to the Roth are not taxed (as they were taxed going in) but the earnings are. Roth accounts are not subject to RMD while the contributer is still alive.

Yes, that footnote is talking about recharacterization of the Roth to Traditional rather than the Traditional to Roth conversion. Further, it's only talking about rollovers and recharacturizations that happened since the end of the last year since it uses the December 31 balance as the starting point of the calculation. It's not particularly common that you'd do a rollover or recharacturization once you're to the point of having to take RMDs but it can happen for example, if you become the beneficiary of someone else's retirement account upon their death.

 

[introvert]

This has nothing whatsoever to do with the tax nature of the Roth, really. By the way your statement is wrong. Your contributions to the Roth are not taxed (as they were taxed going in) but the earnings are. Roth accounts are not subject to RMD while the contributer is still alive.

Roth earnings are taxed?

 

[LdiJ]

This has nothing whatsoever to do with the tax nature of the Roth, really. By the way your statement is wrong. Your contributions to the Roth are not taxed (as they were taxed going in) but the earnings are. Roth accounts are not subject to RMD while the contributer is still alive.

I do not believe that the bolded is correct Ron. That only applies to Roth accounts that have been held less that 5 years. Otherwise, the earnings are not taxed. That is the whole value in a Roth. Otherwise no one would be motivated to have one.

Yes, that footnote is talking about recharacterization of the Roth to Traditional rather than the Traditional to Roth conversion. Further, it's only talking about rollovers and recharacturizations that happened since the end of the last year since it uses the December 31 balance as the starting point of the calculation. It's not particularly common that you'd do a rollover or recharacturization once you're to the point of having to take RMDs but it can happen for example, if you become the beneficiary of someone else's retirement account upon their death.

I do not have any disagreement with the rest.