2010 Roth Conversion Rules
If 100% of a traditional IRA is converted in 2010, could 50% of the taxes on the conversion be paid in 2010, and the other 50% of the taxes be split between 2011 & 2012?
If 100% of a traditional IRA is converted in 2010, could 50% of the taxes on the conversion be paid in 2010, and the other 50% of the taxes be split between 2011 & 2012?
Permalink Submitted by Alan Spross on Mon, 2010-11-22 21:49
No. The choice is limited to 100% in 2010 OR 50% in 2011 and 50% in 2012.
If taxpayer is married and both spouses have accounts they can convert, one spouse can report their conversion in 2010 and the other in 2011 and 2012.
For example: Conversion goal is 100,000 over the 3 years.
Spouse A converts 33,000 and reports all of it in 2010.
Spouse B converts 67,000 and reports 33,500 each in 2011 and 2012.
This equalizes the taxable income in all 3 years, and enables use of the marginal bracket in each of those years.