Roth IRA conversion segregation
I recently read that if employing the segregation strategy for potential recharacterization purposes you should first establish seperate regular IRAs and then convert each. Is this really required? I believed an IRA could be cut up by various assets or asset classes into multiple Roth IRAs.
Permalink Submitted by Alan Spross on Wed, 2010-01-06 20:28
There should be no need to establish separate TIRA accounts initially. Separate conversion Roth accounts are advisable, and also as a possible help in showing that no disallowed reconversion was done, a new TIRA account could be opened to receive recharacterization. Recharacterized conversions can go into any TIRA account, but if you recharacterize into a new TIRA account and never process a conversion from that account, you cannot have executed a disallowed reconversion of those recharacterized funds. But I see no benefit of separate TIRA accounts to process intial conversions.