All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

Reply
Esteemed Pioneer
Posts: 11
Registered: ‎01-25-2015

Taking RMD and then doing Trustee to Trustee IRA Transfer

I need to take my RMD (Required Minimum Distribution) from my Traditional IRA by end of 2017 for tax year 2017 from an IRA custodian A.  If I want to do Trustee to Trustee Transfer of both my Traditional and Roth IRA from custodian A to custodian B for tax year 2017 as non-taxable events, does IRS require I take my RMD from custodian A BEFORE I transfer my Traditional and Roth IRA from custodian A to custodian B?

Tax Pro
Posts: 5,780
Registered: ‎02-23-2016

Re: Taking RMD and then doing Trustee to Trustee IRA Transfer

Hi 2014TryingABC,

 

 

Welcome to the H&R Block community.

 

You can complete a rollover at any time.  However, note that indirect rollovers (those that are not trustee to trustee transfers) are allowed only once in any 12-month period.  There is no requirement that you take the distribution first.

 

If you want to continue growing your funds and not take minimum required distributions yet then roll the money into one Roth IRA.  If you can fully fund a Roth account each year you'll get more out of it in the long run than you will with traditional accounts, and the distributions will be tax-free when you start taking them.  You'll never have to take MRDs with a Roth account.  The down-side is that if you roll into a Roth account you will have to pay tax on pre-tax funds in the present rather than later on.

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Esteemed Pioneer
Posts: 11
Registered: ‎01-25-2015

Re: Taking RMD and then doing Trustee to Trustee IRA Transfer

thank you for your response, but I think my question has been miscommunicated.   the rollover will be Direct Trustee to Trustee Transfer of Traditional IRA.  I'm not converting it to Roth IRA.   Does IRS require that I first take RMD for the year (Jan to Dec of 2017) before I do Direct Trustee to Trustee Transfer for the same year (Jan to Dec 2017)?.

Tax Pro
Posts: 5,780
Registered: ‎02-23-2016

Re: Taking RMD and then doing Trustee to Trustee IRA Transfer

You're welcome.

 

No, there is no such requirement.  You can complete the rollover first if you so choose.