Can RMD money be used to invest in a new IRA?

[D L]

If a person is semi-retired but still working, and is obligated to take out the RMD, could some of the RMB be reinvested in a new IRA?

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[ira smilovitz]

On Tuesday, January 4, 2022 at 2:35:04 PM UTC-5, debbie.l...@gmail.com wrote:
> If a person is semi-retired but still working, and is obligated to take out the RMD, could some of the RMB be reinvested in a new IRA?
>
> --

No and yes. If you are required to take an RMD, you must report it as taxable income. If you have compensation income, you can contribute to an IRA. Since money is fungible, you could use the same dollars to invest - what you can't do is treat the RMD->contribution as a rollover.

Ira Smilovitz, EA
Leonia, NJ