Completing ROTH CONVERSION with a rollover
Hello,
My client age 69 withdrew $100,000 out of his Rollover IRA on December 27, 2011. He now realizes that he has no need for the cash and would now like to put that cash into his ROTH IRA as a ROTH CONVERSION.
May he now contribute this cash to his Roth IRA as a rollover transaction and still have it considered a conversion? If so, is there any special coding that must be done at the firm level, or is that somehow noted on his tax statement?
Thank you for your assistance.
Richard
Permalink Submitted by Alan Spross on Fri, 2012-02-03 03:39
Yes, he can complete the conversion as an indirect 60 day rollover before the 60 days expires. He should advise the custodian to report it as a Roth conversion contribution.
Since the distribution was in 2011, it would be reportable as a 2011 conversion on Form 8606 with the 2011 Form 1040. He probably already has the 1099R reporting the distribution. The Roth custodian will issue a 5498 for 2012, but this does not affect his reporting other than if this is his first Roth IRA contribution of any type, his 5 year holding period will start in 2012, not 2011.
Permalink Submitted by Harold Klein on Sun, 2012-02-05 20:40
Thank you, Alan. That was the answer I needed.
Richard