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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75800  
Subject: Re: Roth IRA Date: 2/21/1998 11:57 AM
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Greetings, BobMarvin, and welcome.

<<I posted this somewhere, but it might have been wrong. I'm trying to find out if anyone has any further knowledge of the attached message. I called the IRS and they claim they know nothing about it. The web site doesn't answer my questions about it. Since I'm in the group addressed, I'm very interested in finding out if this is so. Please advise if you can.

Our sources tell us that the IRS is prepared to take a overly restrictive view of how required minimum distributions from an ordinary IRA or qualified plan should be taken into account for purposes of the $100,000 AGI test for qualifying for a conversion. Even though a reasonable readingof IRC §408A (which defines a conversion as a distribution) would suggest that a conversion by itself should satisfy required minimum distributions (if one converted the entire balance), the IRS is apparently not going to take that position. Worse, they are apparently prepared to say that you cannot even hold back part of a required minimum distribution (even by paying a 50% penalty on a portion that you should have distributed) to meet the $100,000 AGI test. The result--if required minimum distributions are large enough so that you fail the AGI test, you are out of luck. If you are likely to have such a problem, your only option would be to convert before the year in which you turn 70* (which is when required minimum distributions start). Hopefully, cooler heads will prevail at the IRS and they won't go ahead with this age-discriminatory rule. (1/29/98).>>

There's nothing new out other than what you've read. Until the IRS gets around to publishing its final guidance, we don't know what the outcome will be.

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