IRA to Roth Conversion and Basis
Client has a single IRA that he wants to convert to a Roth IRA in 2015. He has no other IRAs. His wife has a Rollover IRA and a Simple IRA through her employer. If he converts 100% of his IRA to a Roth will that create any basis in her IRA’s? Or does the IRS look at this individually, based upon their social security numbers, even though they file a joint return? So if we convert 100% of his IRA we should be fine?
Thank you in advance for your assistance.
Permalink Submitted by Alan - IRA critic on Wed, 2015-12-16 00:54
Yes, ignore the wife’s IRA accounts. Basis for each spouse is reported on an 8606 for that spouse only, and the 8606 only holds one SSN. Basis will only transfer between spouse’s only if the IRA is transferred incident to divorce or one spouse passes with the surviving spouse as beneficiary.