Roth Conversion to avoid Income Contribution Limit and Beneficiary IRA
Last year I converted a Traditional IRA to a Roth, so that in following years I could convert all future non-deductible contributions to the Roth as well (to get around the income limit).
However, if one also has a Beneficiary IRA, I was under the belief that one did not need to convert this to a Roth IRA since it is not an IRA that one can contribute to (as it is a Beneficiary IRA).
Is this correct, or do we also need to convert the Beneficiary IRA to a Roth as well?
The beneficiary IRA is from a non-spouse who died older than 70.5.
Thank You for your help!
Permalink Submitted by Alan - IRA critic on Thu, 2013-11-21 17:22
You are correct, the beneficiary IRA is not included with the valuations shown on Form 8606 for owned IRAs. A beneficiary IRA cannot receive a non spousal contribution and cannot be converted to an inherited Roth IRA, so it is ignored entirely with respect to owned IRA accounts. If the beneficiary IRA had it’s own basis, there would be a separate 8606 for it flagged as applying only to the beneficiary IRA.