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Using the CARES act for a Roth conversion?

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Does anyone know if you can use the $100k IRA withdrawal provision of the CARES act to spread the taxes from the first $100k of a Roth conversion over three years?

 

Advantages to converting all at once instead of converting 1/3 each year might include being able to convert while the traditional IRA balance is lower due to the stock market, or having just one 5-year clock to deal with before Roth money can be withdrawn for retirement.

 

The caveat is that taxes might be higher in later years when the other 2/3 of the conversion are taxed.

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29 minutes ago, nemo said:

Does anyone know if you can use the $100k IRA withdrawal provision of the CARES act to spread the taxes from the first $100k of a Roth conversion over three years?

 

Advantages to converting all at once instead of converting 1/3 each year might include being able to convert while the traditional IRA balance is lower due to the stock market, or having just one 5-year clock to deal with before Roth money can be withdrawn for retirement.

 

The caveat is that taxes might be higher in later years when the other 2/3 of the conversion are taxed.

nothing I've read says you can.

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8 minutes ago, hegemony said:

nothing I've read says you can.

I wouldn't think anything would say that directly, but it might be implied.

 

It seems like you could take a traditional IRA distribution as if you were going to do a rollover, count that as a CARES act withdrawal, and then put it into a Roth IRA as a conversion.

 

So I guess I was more looking for something that says you can't.

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Posted (edited)
20 minutes ago, hegemony said:

CARES act withdrawals are still subject to ordinary income tax.

Yes, I understand.  That is not part of the advantage.

 

The advantage is that the tax is paid over three years, unlike what would normally happen with a Roth conversion.

Edited by nemo

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