I agree with toddthbod sort of. The first money that comes out is considered to be RMD. However, I think there may be an exception.Was your full RMD already completed when you did the Roth conversion? It sounds like not. Vanguard would then be correct that this distribution from your traditional IRA was in fact part of your RMD, and you have in fact made an ineligible Roth contribution. You are not allowed to make a Roth conversion before you have satisfied your RMD for the year.Vanguard has an issue regarding Roth IRA rollover from traditional IRA, improperly crediting a roth rollover to my RMD. This year I rolled over a small amount into a new Roth account, and Vanguard credited the rollover to my RMD. THIS IS NOT ALLOWED by IRS and if I were to trust Vanguard on the status of my RMD for this account, I would be guilty of an illegal rollover and thus be short on my RMD. That would incur penalty's of course.
I called Vanguard on this and nothing is being done about this error. Be careful in tracking you RMD's when you do a roth conversion at Vanguard!
If you have more than 1 IRA, you are allowed to take the RMD for all your IRAs from just one of the IRA accounts. There is no way for Vanguard to know that the RMD has not already been or will later be satisfied by taking it from another source. So perhaps the custodian's tracking of RMDs is not depended on for accuracy anyway.
I only have one IRA at one place, so I don't know how it works. I'm not sure if the custodian reports the RMD withdrawal to the IRS or not. I suspect not because confusion would occur for people who have more than one IRA account. It is possible that the RMD thing is between the taxpayer and the IRS only.
Statistics: Posted by retiredjg — Mon Jul 01, 2024 7:52 am — Replies 6 — Views 586