IRA Distribution?
I have a new client I just met today age 68 who took a full distribtion from an IRA of about $5,000 and just received a check last week. Her MAGI income is less than $100,000 and she now does not need the income. Can she convert to a ROTH IRA within the 60 day window or must she do a direct rollover conversion to qualify? She is aware that the $5,000 will be consider a taxable event in either case.
Permalink Submitted by Alan Spross on Tue, 2008-09-23 02:26
She can do a Roth conversion by rollover as well as by transfer directly from the TIRA. She can also roll it back into the TIRA if she wants to avoid the taxable distribution IF the rollback does violate the 12 month waiting period from a prior rollover.
In fact, a taxpayer that cannot roll the funds back due to the waiting period can still do a Roth conversion, because conversions do not count against the one rollover limit per 12 month period.
Permalink Submitted by Clyde Wolf on Tue, 2008-09-23 17:59
I believe Alan-oniras meant to say,
“IF the rollback does NOT violate the 12 month waiting period from a prior rollover.”