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Typically you'd file Form 8606 with your tax return to determine how much of your distribution is taxable. Specifically, Part III deals with distributions from Roth IRA's. However, the instructions indicate: Don’t include on line 19 any of the following. ..... Distributions that are incident to divorce. The transfer of part or all of your Roth IRA ...


In general, one should be taking one's distributions based not just on one's current tax bracket, but also on what one thinks one's future tax bracket will be. For instance, if someone is currently in the 22% tax bracket, but thinks they'll be in the 12% bracket later, they should not take any distributions now. In your case, if I understand the formula ...


@Aganju If OP converts to Roth, that money is still taxed. Albeit, the tax rate is based on current tax bracket which may be lower than future bracket and all gains and distributions are tax free in the future. Think that should be mentioned. As @pete-b mentioned, your beneficiaries are likely to receive a large portion and this too should be considered if ...


You should consider the option of converting a chunk into a Roth account every year (instead of into a taxable account). The (small) disadvantage is that it is basically 'stuck' for five years; the advantage is that any further gains are tax-free.

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