Ask Bob: Are There Any Restrictions on Coronavirus-related Distributions?

Robert Powell, CFP®

Question

I am eligible for a coronavirus-related distribution (CRDs) and plan to take one later this year. I also plan on doing a Roth conversion in the fourth quarter of this year. Can I use the CRD to pay my fourth quarter estimated taxes to allow for a 100% conversion amount into my Roth IRA account? 

Answer

If you are eligible to take a CRD you can use those funds for any purpose, says Sarah Brenner, an IRA expert with Ed Slott & Co. And that, she says, could include paying taxes on a conversion. "There are no restrictions on what you do with the funds," says Brenner.

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