Mehrdad1 wrote:

- quote -

Okay then. You're saying send the check back and request
them to void same and then do the direct transfer? I doubt
that will work.

ChEAr$,
Harlan Lunsford, EA n LA

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Hey Humph-

Don't do a Rollover where you receive a check from the IRA
Trustee as this will constitute "Constructive Receipt of a
DISTRIBUTION" and you will be then under a 60 day clock to
either reinvest the money in another IRA or convert the
money into a ROTH. If you fail to accomplish that within the
60 day period then you will be hit with early distribution
penalties. Instead, do a Trustee to Trustee transfer - it is
cleaner & faster and then you won't have to worry about the
60 day rule. I've seen the results of that mistake many
times! Otherwise get a good experienced Investment Broker to
do it.

Mark-

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Mike L wrote:
- quote -

The law does not define the word "conversion" to mean 100%
of your IRA assets are transferred or rolled over to a Roth
IRA. A taxpayer may elect to convert any amount in any given
year. An informed taxpayer should always perform a "what if"
analysis to ensure that any conversion makes financial
sense.

--
Alan
http://taxtopics.net

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thanks.

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A.G. Kalman wrote in

- quote -

I believe though, that you can do your conversion over
multiple years which may help keep you within a reasonable
tax bracket, if desireable.

--
Mike

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Humpfries <humpdy85[at]hotmail.com> wrote:

- quote -

This year fill out the capital loss carryover worksheet to
see how much to carryover to next year. Probably 10,000.

Next year you enter 10,000 as the amount of loss
carryforward.

Then complete the rest of schedule D. If there are no other
entries on schedule D, 3000 of the loss is claimed and you
complete the Capital Loss Carryover Worksheet to see how
much to carryover to the next year, probably 7000. Repeat
each year until done.

- quote -

In order to convert your old retirement plan to a Roth, you
go through two distinct steps:

1. First you rollover the old plan into a traditional IRA.

No tax will be due at this point.

2. Next you convert some or all of the traditional IRA into a
Roth IRA, if eligible to do so. That is taxable income.

You will be able to reduce your taxable income by the 3000
of capital loss we assumed you would have.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Humpfries wrote:

- quote -

There is no limit (other than death) to the number of years
that net losses in excess of $3000 can be carried forward.

- quote -

A conversion is taxable at ordinary tax rates. You would
pay tax at whatever marginal tax bracket you are in in the
year of conversion. This is "ordinary" income. You may not
offset this income with net capital losses in excess of the
$3000 limitation.

--
Alan
http://taxtopics.net

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Humpfries <humpdy85[at]hotmail.com> wrote:

- quote -

The phrase you are looking for is "carrying forward" the
losses (not "rollover"), and yes.

- quote -

Roth conversions are taxed as regular income; you do not
benefit from the capital gains tax rates, nor do they offset
capital losses.

Steve not a tax pro

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"Humpfries" <humpdy85[at]hotmail.com> writes:

- quote -

Until you die.

- quote -

That's incorrect. There's no limit on the amount of capital
loss that can be carried over from year to year. However,
you can only USE $3,000 of that loss against *ordinary
income* each year (the amount you can use against capital
gains is only limited by the amount of the gain).

- quote -

You keep carrying over the loss until it is all used up or
until you die, whichever comes first.

- quote -

The taxable converted amount would be taxed as ordinary
income -- just like bank interest, for example. So it would
be taxed at your top rate (and a portion of it maybe higher,
if the extra taxable income pushes you into the next
bracket).

- quote -

No.

Or, more precisely, no differently than you can against
any other ordinary income. See above.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Humpfries wrote:

- quote -

A capital loss can be carried over until it is used up, or
you expire. It is first used each year to offset any capital
gains, then up to $3,000 can be used to offset ordinary
income, so it may not take 3-4 years.

- quote -

Your conversion is taxed as ORDINARY INCOME, at the same
rate as other (non-capital gain) income. The retirement
account must first be rolled over to a traditional IRA
(nontaxable), then that IRA is converted to a Roth IRA
(taxable). Since the conversion amount is taxed as ordinary
income, only $3,000 of your capital loss is offset. The
remainder carries over to the following and future years.

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"Humpfries" <humpdy85[at]hotmail.com> wrote:

- quote -

The word you're looking for is "carry forward". Rollover is
what you do when you transfer money from one type of
retirement account to another.

- quote -

Net capital losses can be used to offset up to $3,000 in
ordinary income each year. You carry the entire excess
forward, and can continue to do so until you use it up.

- quote -

First you have to roll the retirement account to an ordinary IRA. Then
you convert the IRA to a Roth IRA. You pay tax on it as if you were
withdrawing from the IRA, except there's no penalty for early
withdrawal. This means you pay your ordinary income tax rate. You can
use the first $3,000 of your net capital losses to offset this.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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I have two situations.

Situtation one: If I have a $10,000 loss from the sale of
stocks and mutuals funds in 2005, how many years can I
rollover the loss. I know I can only rollover $3,000 max
each year, but I continue to rollover for four years until I
rollover the entire $10,000 in loss?

Situation two: If I want to convert my old retirement
account (pre-tax) to a Roth IRA, at what tax rate would I be
paying taxes? The retirement account is still being held at
the old employer. Once converted from the old employer
retirement account into the new Roth IRA, can I offset the
tax gains with the $10,000 loss from the sale of stocks and
mutuals funds?

Thanks!

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