Roth conversions and the pro rata rule – does it apply to inherited IRAs?
my client wants to do a back door Roth but he has an inherited IRA worth about $100k. He has no other individual IRAs. Does this money factor into the pro rata rule? How about spousal IRAs? Does the pro rata rule only apply per SSN on the person doing the Roth conversion or does it aggregate household assets?
Thanks,
Larry
Permalink Submitted by Alan - IRA critic on Wed, 2020-07-01 18:47
The pro rata rule only applies to the individual’s IRAs, not the spouses. And it does not apply to inherited IRAs. These other IRA values are not included on line 6 of Form 8606 from which the taxable amount of a conversion is calculated.