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#16
01-20-2004, 09:06 AM
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 Re: Traditional to Roth with loss? - quote - > > For all Traditional IRAs:
WHEW!> > Contributed > > Deducted on 1040 Basis in Traditional IRA > > 2000 2000 > > 500 1500 > > 2001 2000 > > 500 1500 > > 2002 2000 > > 500 1500 > > Total 6000 > > 1500 4500 > > > Today's Market Value = 1000 > > Schedule A 2% limited deduction = 4500 - 1000 = 3500 > > Amount to be rolled into Roth IRA today = 1000 > Oh, dear. I give up. What a wrap mess. > The columns are: > Years: 2000 2001 2002 > Contributed: 2000 2000 2000 = 6000 > Deducted: 500 500 500 = 1500 > Basis: 1500 1500 1500 = 4500 So I see now you really did have an after tax basis in the IRA. Good. I guess that just about "wraps" it up, you reckon? Cheer$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#15
01-20-2004, 08:47 AM
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| Re: Traditional to Roth with loss? Joanne <Joanne[at]jobirdnest.com> wrote: - quote - > "Joanne" <Joanne[at]jobirdnest.com> wrote:
So if your unrecovered basis was 4500 and your total> > For all Traditional IRAs: > > Contributed > > Deducted on 1040 Basis in Traditional IRA > > 2000 2000 > > 500 1500 > > 2001 2000 > > 500 1500 > > 2002 2000 > > 500 1500 > > Total 6000 > > 1500 4500 > > > Today's Market Value = 1000 > > Schedule A 2% limited deduction = 4500 - 1000 = 3500 > > Amount to be rolled into Roth IRA today = 1000 > Oh, dear. I give up. What a wrap mess. > The columns are: > Years: 2000 2001 2002 > Contributed: 2000 2000 2000 = 6000 > Deducted: 500 500 500 = 1500 > Basis: 1500 1500 1500 = 4500 distributions, which left you with nothing in any traditional IRA was 1200, you have a deductible investment loss of 3300, which goes on Schedule A Line 22. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#14
01-16-2004, 08:18 AM
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| Re: Traditional to Roth with loss? "Joanne" <Joanne[at]jobirdnest.com> wrote: - quote - > For all Traditional IRAs:
Oh, dear. I give up. What a wrap mess.> Contributed > Deducted on 1040 Basis in Traditional IRA > 2000 2000 > 500 1500 > 2001 2000 > 500 1500 > 2002 2000 > 500 1500 > Total 6000 > 1500 4500 > Today's Market Value = 1000 > Schedule A 2% limited deduction = 4500 - 1000 = 3500 > Amount to be rolled into Roth IRA today = 1000 The columns are: Years: 2000 2001 2002 Contributed: 2000 2000 2000 = 6000 Deducted: 500 500 500 = 1500 Basis: 1500 1500 1500 = 4500 -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#13
01-15-2004, 06:04 AM
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| Re: Traditional to Roth with loss? "Harlan Lunsford" <lunstax[at]bellsouth.net> wrote: - quote - > Joanne wrote:
You would never know it from the way I asked the question,> > "Arthur Kamlet" <kamlet[at]panix.com> wrote: > > > Joanne <Joanne[at]jobirdnest.com> wrote: > > > > Can I do the following: > > > > > > > Roll a Traditional IRA into a Roth > > > > > > > 1. in January 2004 for the year 2003? > > > No, conversions of traditional to Roth IRAs must complete by > > > December 31 for that tax year. > > > > 2. and recognize the loss if the Traditional IRA has a net loss? > > > No > > > > > If you have taken a complete distribution of your entire > > > traditional IRA -- all traditional accounts -- and your > > > total distributions were less than your after-tax > > > contributions (your IRA basis) then the difference is > > > deductible on Schedule A Line 22, subject to 2% reduction. > > > The year of the distribution is the year of your income > > > recognoition and the deduction. So you must have taken the > > > distribution by Dec 31 to qualify for a 2003 loss. > > Thank you, Art. Is it possible for 2004 to do the roll-over > > into the Roth and still take the Schedule A deduction? > Joanne, notice that Art mentioned "after-tax contributions", > which means that portion of your total IRA balance resulting > from after tax contributions. Naturally, if all > contributions were before taxes, then you have no such > basis, hence no possibility of any Schedule A loss. > Others will weigh in here, I'm sure. but I do think I understand. Here is an example: For all Traditional IRAs: Contributed Deducted on 1040 Basis in Traditional IRA 2000 2000 500 1500 2001 2000 500 1500 2002 2000 500 1500 Total 6000 1500 4500 Today's Market Value = 1000 Schedule A 2% limited deduction = 4500 - 1000 = 3500 Amount to be rolled into Roth IRA today = 1000 If any of this logic is flawed, please let me know. Thank you all for the input. -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#12
01-14-2004, 08:53 AM
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| Re: Traditional to Roth with loss? "Arthur Kamlet" <kamlet[at]panix.com> wrote: - quote - > Joanne <Joanne[at]jobirdnest.com> wrote:
Thank you, Art. Just the answer I was hoping for.> > "Arthur Kamlet" <kamlet[at]panix.com> wrote: > > > Joanne <Joanne[at]jobirdnest.com> wrote: > > > > Can I do the following: > > > > > > > Roll a Traditional IRA into a Roth > > > > > > > 2. and recognize the loss if the Traditional IRA has a net loss? > > > If you have taken a complete distribution of your entire > > > traditional IRA -- all traditional accounts -- and your > > > total distributions were less than your after-tax > > > contributions (your IRA basis) then the difference is > > > deductible on Schedule A Line 22, subject to 2% reduction. > > > The year of the distribution is the year of your income > > > recognoition and the deduction. So you must have taken the > > > distribution by Dec 31 to qualify for a 2003 loss. > > Thank you, Art. Is it possible for 2004 to do the roll-over > > into the Roth and still take the Schedule A deduction? > If you completely cash out all traditional IRAs to convert > some or all of them to a Roth then you qualify for the > Schedle A deduction. -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#11
01-14-2004, 08:53 AM
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| Re: Traditional to Roth with loss? Joanne wrote: - quote - > "Arthur Kamlet" <kamlet[at]panix.com> wrote:
Joanne, notice that Art mentioned "after-tax contributions",> > Joanne <Joanne[at]jobirdnest.com> wrote: > > > Can I do the following: > > > > > Roll a Traditional IRA into a Roth > > > > > 1. in January 2004 for the year 2003? > > No, conversions of traditional to Roth IRAs must complete by > > December 31 for that tax year. > > > 2. and recognize the loss if the Traditional IRA has a net loss? > > No > > > If you have taken a complete distribution of your entire > > traditional IRA -- all traditional accounts -- and your > > total distributions were less than your after-tax > > contributions (your IRA basis) then the difference is > > deductible on Schedule A Line 22, subject to 2% reduction. > > The year of the distribution is the year of your income > > recognoition and the deduction. So you must have taken the > > distribution by Dec 31 to qualify for a 2003 loss. > Thank you, Art. Is it possible for 2004 to do the roll-over > into the Roth and still take the Schedule A deduction? which means that portion of your total IRA balance resulting from after tax contributions. Naturally, if all contributions were before taxes, then you have no such basis, hence no possibility of any Schedule A loss. Others will weigh in here, I'm sure. Cheer$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#10
01-14-2004, 08:14 AM
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| Re: Traditional to Roth with loss? Arthur Kamlet wrote: - quote - > Joanne <Joanne[at]jobirdnest.com> wrote:
I'm trying to figure out what loss we are discussing. In> > "Arthur Kamlet" <kamlet[at]panix.com> wrote: > > > Joanne <Joanne[at]jobirdnest.com> wrote: > > > > Can I do the following: > > > > > > > Roll a Traditional IRA into a Roth > > > > > > > 2. and recognize the loss if the Traditional IRA has a net loss? > > > If you have taken a complete distribution of your entire > > > traditional IRA -- all traditional accounts -- and your > > > total distributions were less than your after-tax > > > contributions (your IRA basis) then the difference is > > > deductible on Schedule A Line 22, subject to 2% reduction. > > > The year of the distribution is the year of your income > > > recognoition and the deduction. So you must have taken the > > > distribution by Dec 31 to qualify for a 2003 loss. > > Thank you, Art. Is it possible for 2004 to do the roll-over > > into the Roth and still take the Schedule A deduction? > If you completely cash out all traditional IRAs to convert > some or all of them to a Roth then you qualify for the > Schedle A deduction. another part of this thread, Joanne said "So, #2 should have added that the current value of the Traditional IRA is less than the amount originally excluded from income." She has no cost basis in her IRA. No cost basis, no loss. The money has never been taxed. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#9
01-13-2004, 04:49 PM
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| Re: Traditional to Roth with loss? Joanne <Joanne[at]jobirdnest.com> wrote: - quote - > "Arthur Kamlet" <kamlet[at]panix.com> wrote:
If you completely cash out all traditional IRAs to convert> > Joanne <Joanne[at]jobirdnest.com> wrote: > > > Can I do the following: > > > > > Roll a Traditional IRA into a Roth > > > > > 2. and recognize the loss if the Traditional IRA has a net loss? > > If you have taken a complete distribution of your entire > > traditional IRA -- all traditional accounts -- and your > > total distributions were less than your after-tax > > contributions (your IRA basis) then the difference is > > deductible on Schedule A Line 22, subject to 2% reduction. > > The year of the distribution is the year of your income > > recognoition and the deduction. So you must have taken the > > distribution by Dec 31 to qualify for a 2003 loss. > Thank you, Art. Is it possible for 2004 to do the roll-over > into the Roth and still take the Schedule A deduction? some or all of them to a Roth then you qualify for the Schedle A deduction. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#8
01-12-2004, 11:35 AM
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| Re: Traditional to Roth with loss? "Arthur Kamlet" <kamlet[at]panix.com> wrote: - quote - > Joanne <Joanne[at]jobirdnest.com> wrote:
Thank you, Art. Is it possible for 2004 to do the roll-over> > Can I do the following: > > > Roll a Traditional IRA into a Roth > > > 1. in January 2004 for the year 2003? > No, conversions of traditional to Roth IRAs must complete by > December 31 for that tax year. > > 2. and recognize the loss if the Traditional IRA has a net loss? > No > If you have taken a complete distribution of your entire > traditional IRA -- all traditional accounts -- and your > total distributions were less than your after-tax > contributions (your IRA basis) then the difference is > deductible on Schedule A Line 22, subject to 2% reduction. > The year of the distribution is the year of your income > recognoition and the deduction. So you must have taken the > distribution by Dec 31 to qualify for a 2003 loss. into the Roth and still take the Schedule A deduction? -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#7
01-12-2004, 11:16 AM
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| Re: Traditional to Roth with loss? Joanne wrote: - quote - > "Joanne" <Joanne[at]jobirdnest.com> wrote:
You have no cost basis in your IRA if all of your> > Can I do the following: > > > Roll a Traditional IRA into a Roth > > > 1. in January 2004 for the year 2003? > > > 2. and recognize the loss if the Traditional IRA has a net loss? > I should have been more specific about #2. By the way, I > did find the answer to #1 which is no. > So, #2 should have added that the current value of the > Traditional IRA is less than the amount originally excluded > from income. contributions were excluded from income. In other words, regardless of the value of the IRA, you never paid income tax on that amount. When you withdraw the proceeds and roll it over to a Roth or if you convert it to a Roth you will have a taxable distribution. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#6
01-12-2004, 11:16 AM
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| Re: Traditional to Roth with loss? "Joanne" <Joanne[at]jobirdnest.com> writes: - quote - > > 2. and recognize the loss if the Traditional IRA has a net loss?
Assuming that all contributions were deducted, there is no> I should have been more specific about #2. By the way, I > did find the answer to #1 which is no. > So, #2 should have added that the current value of the > Traditional IRA is less than the amount originally excluded > from income. "loss" to recognize. The contributions were already deducted from income--you can't double dip and deduct them again as losses. Phil Marti Topeka, KS << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#5
01-12-2004, 10:57 AM
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| Re: Traditional to Roth with loss? kamlet[at]panix.com (Arthur Kamlet) wrote: - quote - > Joanne <Joanne[at]jobirdnest.com> wrote:
Not quite. The WITHDRAWAL from the traditional IRA must> > Can I do the following: > > > Roll a Traditional IRA into a Roth > > > 1. in January 2004 for the year 2003? > No, conversions of traditional to Roth IRAs must complete by > December 31 for that tax year. occur BEFORE January 1, but the rollover/conversion to a Roth IRA can occur anytime in the following 60 days - even if done in 2004. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#4
01-12-2004, 10:57 AM
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| Re: Traditional to Roth with loss? "Joanne" <Joanne[at]jobirdnest.com> wrote: - quote - > "Joanne" <Joanne[at]jobirdnest.com> wrote:
Unless the traditional IRA contained NONDEDUCTIBLE> > Can I do the following: > > > Roll a Traditional IRA into a Roth > > > 1. in January 2004 for the year 2003? > > > 2. and recognize the loss if the Traditional IRA has a net loss? > I should have been more specific about #2. By the way, I > did find the answer to #1 which is no. > So, #2 should have added that the current value of the > Traditional IRA is less than the amount originally excluded > from income. contributions (documented on your 8606), there is no LOSS to recognize. It merely means that you pay less tax on the amount converted to Roth IRA. Only if the current value of the traditional IRA is less than the total nondeductible contributions (your "basis") would there be a loss to recognize (Miscellaneous Deduction). << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
01-12-2004, 10:57 AM
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| Re: Traditional to Roth with loss? Joanne wrote: - quote - > "Joanne" <Joanne[at]jobirdnest.com> wrote:
Still don't matter. You DO have a loss; but no deduction.> > Can I do the following: > > > Roll a Traditional IRA into a Roth > > > 1. in January 2004 for the year 2003? > > > 2. and recognize the loss if the Traditional IRA has a net loss? > I should have been more specific about #2. By the way, I > did find the answer to #1 which is no. > So, #2 should have added that the current value of the > Traditional IRA is less than the amount originally excluded > from income. cheer$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
01-11-2004, 10:49 AM
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| Re: Traditional to Roth with loss? "Joanne" <Joanne[at]jobirdnest.com> wrote: - quote - > Can I do the following:
I should have been more specific about #2. By the way, I> Roll a Traditional IRA into a Roth > 1. in January 2004 for the year 2003? > 2. and recognize the loss if the Traditional IRA has a net loss? did find the answer to #1 which is no. So, #2 should have added that the current value of the Traditional IRA is less than the amount originally excluded from income. -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
01-11-2004, 10:30 AM
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| Re: Traditional to Roth with loss? Joanne <Joanne[at]jobirdnest.com> wrote: - quote - > Can I do the following:
No, conversions of traditional to Roth IRAs must complete by> Roll a Traditional IRA into a Roth > 1. in January 2004 for the year 2003? December 31 for that tax year. - quote - > 2. and recognize the loss if the Traditional IRA has a net loss?
NoIf you have taken a complete distribution of your entire traditional IRA -- all traditional accounts -- and your total distributions were less than your after-tax contributions (your IRA basis) then the difference is deductible on Schedule A Line 22, subject to 2% reduction. The year of the distribution is the year of your income recognoition and the deduction. So you must have taken the distribution by Dec 31 to qualify for a 2003 loss. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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01-11-2004, 10:11 AM
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| Re: Traditional to Roth with loss? Joanne wrote: - quote - > Can I do the following:
Yes, but if done IN 2004, it is a 2004 transaction; nothing> Roll a Traditional IRA into a Roth > 1. in January 2004 for the year 2003? to do with 2003. - quote - > 2. and recognize the loss if the Traditional IRA has a net loss?
such a rollover involves paying the tax, thus your "loss"will be part of reduced taxes on the balance overrolled. (rolled over?) Cheer$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
01-10-2004, 07:43 AM
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| Traditional to Roth with loss? Can I do the following: Roll a Traditional IRA into a Roth 1. in January 2004 for the year 2003? 2. and recognize the loss if the Traditional IRA has a net loss? -- Sincerely, Joanne << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| loss, roth, traditional |
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