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I am 75 years old and have lived in Thailand for 14 years.

Between my Social Security and...
I am 75 years old and have lived in Thailand for 14 years. Between my Social Security and private pension, my income is about $3300/month. I have a TSA worth about $240,000 from teaching in the state of Wisconsin on which my MRD is usually about $9000. I can live well on $1000/month so I do NOT need additional income. I contribute to two 529 college plans for my grandsons and plan on doing the same for my two granddaughters in a few more years. I am considering converting my TSA to a Roth because I do not want any MRD but I realize the tax burden will be significant. Is there any method of doing income averaging over a period of five years or so to minimize the tax burden? I will appreciate any advice you can give me! I will most likely be cursed(?) with old age as my mother died at age 107. I workout at a gym daily and am in excellent health. Thanks, XXXXX XXXXX
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Answered in 16 minutes by:
3/10/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,875
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer,
Unfortunately, a distribution from your TSA plan would not qualify as a lump-sum distribution. This means you cannot use the special 10-year tax option to calculate the taxable portion of a distribution, which is what your TSA conversion would imply. Had you decided to do this in 2010, you would have been allowed to spread the tax over 2 years rather than just the conversion year.
I wish I could tell yo that you would not be taxed on the earnings all in the conversion year but the rules would not allow that.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,875
Experience: 15years with H & R Block. Divisional leader, Instructor
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