backdoor Roth IRA
I put 7000 into my traditional ira and converted it to my RothIRA COMPLETING THE BACK DOOR ROTH CONVERSATION FOR 2020.I DO NOT HAVE ANY OTHER IRAS.THIS IS THE FOUTH YEAR I HAVE DONE THIS.I AM THINGING ABOUT ROLLING MR FUNDS FROM A 457 DEFERRED COMPENSATION PLAN TO AVANGUARD ROLLOVER IRA . WILL THERE BE A TAX CONSEQUENCE FOR MY ROTH CONVERSATION SINCE I WILL HAVE MONEYIN A NEW IRA FOR THE YEAR 2020 EVEN THOUGH I DID THE ROTH CONVERSATION BEFORE THE ROLEOVER.
Permalink Submitted by Alan - IRA critic on Wed, 2020-02-12 15:06
Yes. Taxation of your Roth conversion is determined based on IRA values on 12/31, not the date you do the conversion. Therefore, any rollover IRA balance on 12/31/2020 will cause the conversion you just did to be mostly taxable.