Converting Tradtional IRA into Roth IRA
One of my clients ‘heard’ that sometime in the future [either 2009 or 2010], she can convert her traditional IRA into a ROTH IRA without any income tax or penalty considerations. AGI in 2009 and 2010 is estimated to be $100,000 to $125,000. Is this tax-free conversion true? If so, any direction to find specifics would be helpful. Thanks.
PK
Permalink Submitted by Denise Appleby on Thu, 2008-06-05 21:38
The conversion will not be tax-free. What she may have meant is that the $100,000 MAGI rule, which says if your MAGI is over $100,000 you are ineligible to convert, and the married-filing separately rule which says you are ineligible to convert if your tax filing status is such…will no longer apply in 2010 and afterwards. The income from conversions done in 2010 can be spread over 2010 and 2011. But it will be subject to income tax.
Permalink Submitted by Denise Appleby on Thu, 2008-06-05 21:53
No. You are absolutely right Tom.
Thanks for the catch. 😛 😆
Denise