Permalink Submitted by William Fisher on Thu, 2010-08-05 20:13
I thought that was one of the 12 mistakes to avoid on conversion. I am probable just confused. Please clarify if possible. Also the 2 year waiting period? Thanks, Went back and reviewed IRA advisor and understand now. Thanks again.
Permalink Submitted by Alan Spross on Thu, 2010-08-05 21:20
The two year waiting period for SIMPLE IRAs requires that no rollover be executed until 2 years have passed from the date of the first SIMPLE contribution. If this happens, the distribution is taxable. For SIMPLE to Roth conversions this is no deterrent because conversions would be taxable in any event. Therefore, the rules indicate that such a conversion cannot even be done. (Reg 1.408A-4).
Permalink Submitted by Alan Spross on Thu, 2010-08-05 16:50
Yes. A SIMPLE IRA can also be converted directly to a Roth IRA. Don’t forget the 2 year waiting period for either of these rollovers.
Permalink Submitted by William Fisher on Thu, 2010-08-05 20:13
I thought that was one of the 12 mistakes to avoid on conversion. I am probable just confused. Please clarify if possible. Also the 2 year waiting period? Thanks, Went back and reviewed IRA advisor and understand now. Thanks again.
Permalink Submitted by Alan Spross on Thu, 2010-08-05 21:20
The two year waiting period for SIMPLE IRAs requires that no rollover be executed until 2 years have passed from the date of the first SIMPLE contribution. If this happens, the distribution is taxable. For SIMPLE to Roth conversions this is no deterrent because conversions would be taxable in any event. Therefore, the rules indicate that such a conversion cannot even be done. (Reg 1.408A-4).
Permalink Submitted by William Fisher on Fri, 2010-08-06 13:16
Thank you for your help.