Inherited IRA and back door ROTH
If a client has an inherited IRA, can they still benefit from the back door ROTH IRA Strategy or will the IRS consider the inherited IRA pro rata when they convert the non-deductible IRA to a ROTH IRA?
If a client has an inherited IRA, can they still benefit from the back door ROTH IRA Strategy or will the IRS consider the inherited IRA pro rata when they convert the non-deductible IRA to a ROTH IRA?
Permalink Submitted by Alan - IRA critic on Mon, 2017-12-11 02:55
The inherited IRA does not affect the back door pro rate calculations at all. Only owned non Roth IRAs affect the taxable % of conversions because any basis in owned IRAs is never combined with any basis or value of inherited iRAs.