Determining RMD date when 73rd birthday is midyear

[Summit1]

I have a taxpayer who turns 73 on June 14, 2026. She has a tradtional IRA with about 25k that she wants to roll into a Roth IRA prior to her 73rd birthday. Can she do this without having to take a 2026 distribution?

[Just-Lisa-Now-]

Copy/paste your exact question into Google (I just tried it) and it explains what she can do.

[BobKamman]

Also, Roth IRAs are stupid.  

[qbteachmt · Accepted solution]

No.

There is absolutely nothing about this issue that relates to birthdate being mid-year.You might be thinking of the old rule, which still used "year you turn 70 1/2" and not by birthdate.

Everything is based on Tax Year. Her actions in 2026 are actions in her 73rd Year. It doesn't matter when in this year she takes these actions or the date of her birth. They're all part of 2026.

RMDs begin this year, because she turns 73 (for those born 1951–1959) this year. It is changed to 75 for those born 1960 or later. She can take her RMD any time in 2026 or over time in 2026. The deadline for the first RMD is April 1 of the following year: 2027 for her first RMD year, but then she'll need to take two RMDs in 2027 if she waits, because subsequent RMDs must be taken by Dec. 31 annually.

She can convert (not roll) Traditional IRA funds to Roth IRA funds. If she doesn't have any basis in the Trad IRA, then the amount converted is reported as taxable ordinary income on her Form 1040 for the 2026 tax year.

Conversions will reduce the Trad IRA account balance for purposes of RMD. They don't replace the RMD. They won't eliminate her first RMD, because the RMD is calculated on the fair market value (FMV) of the IRA as of December 31 of the previous year. Even if she stalls until April 1, 2027, it uses the Dec 31, 2025 ending value.

[Summit1]

So I have actually have given them incorrect advice. I need to let them know that she will need to take the first RMD for 2026 and then she can convert the balance left in the traditional to a Roth. I am assuming she will receive (2) 1099-R's since there will be differenct codes. 

Thank you!

[Accountant-Man]

Not if you're the late US Senator, William ROTH, from Delaware.

[BobKamman]

@Accountant-Man Senator Roth never dreamed of a scam where the government could convince people to pay more tax now for the privilege of paying less tax later.  The Roth IRA in 1997 was a $2,000 option for people who didn't want to risk the penalty on early withdrawals.  Until 2010, a decade after Roth retired, conversions were allowed only for taxpayers with less than $100,000 AGI.

When the Roth IRA was enacted, "the Congress believed that some individuals would be more likely to save if funds set aside in a tax-favored account could be withdrawn without tax after a reasonable holding period for retirement or certain special purposes. Some taxpayers might find such a vehicle more suitable for their savings needs." That included people over 70 1/2, who at the time were prohibited from contributing to a traditional IRA.  At the time, Senator Roth was 76.