roth conversion
I have a client who is considering rolling tradtional IRA to Roth IRA.
he receives $200,000 annual income from tax-free muni bonds. Is this
income included in AGI?
I have a client who is considering rolling tradtional IRA to Roth IRA.
he receives $200,000 annual income from tax-free muni bonds. Is this
income included in AGI?
Permalink Submitted by Alan Spross on Fri, 2008-05-30 23:13
No, if the income is not included in normal AGI on the tax return, it will not affect the Roth conversion calculation of the 100,000 MAGI limit.
There is no provision to include it such as for taxation of SS benefits, although if the muni income causes up to 85% of SS income to be reported on Form 1040, then the muni income can result in the SS contributing to AGI and possibly exceeding the threshold.
Bond income that must be included for AMT purposes that can trigger the AMT will not affect the Roth conversion threshold.