Roth Conversion 2010
I am unclear as to the two year rule. If a client converts a traditional 100,000 IRA to Roth 5/1/2010. He has two years to pay the taxes on the conversion. Would that be half on his 2010 return filed by (4/15/2011) and half in 2011 filed by 4/15/2012) or ? Other then paying the entire tax in one year (another option) what are the other choices. Thank you
Permalink Submitted by Alan Spross on Thu, 2010-03-18 00:26
The deferred option requires half the income to be reported on the 2011 return (tax due by 4/15/2012) and the other half on the 2012 return (tax due by 4/15/2013).
If taxpayer opts out of the deferral, then all the income is reported on the 2010 return (tax due 4/15/2011).
Those are the only two options.