Pedro wrote:

- quote -

The line "However, the 1-year waiting period does not
apply." is the answer as I understand it. I've heard experts
remark that the IRA in between the employee plan and Roth
IRA is there for little purpose. It only serves to confuse
people. There is no mimimum time it must stay there, I just
suspect the broker would like the check to clear before can
move the money along.

JOE

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"Pedro" <pedro[at]noreply.com> wrote:

- quote -

Don't be. Neither the rollover from the plan to your
traditional IRA nor a conversion to Roth counts against your
once per 12 months rollover limit.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Earlier this year, I had my pension plan from a former
employer rolled over into an IRA. I now wish to take
advantage of my low income status by converting that IRA
into a Roth IRA, however I'm concerned about the 1-year
waiting period.

From Pub. 590 (because I don't understand the actual tax code):
"Generally, if you make a tax-free rollover of any part of a
distribution from a traditional IRA, you cannot, within a
1-year period, make a tax-free rollover of any later
distribution from that same IRA. You also cannot make a
tax-free rollover of any amount distributed, within the same
1-year period, from the IRA into which you made the tax-free
rollover. The 1-year period begins on the date you receive
the IRA distribution, not on the date you roll it over into
an IRA."

Later, in the section on rollovers from employer plans to
IRAs, I read the following:

"The once-a-year limit on IRA-to-IRA rollovers does not
apply to eligible rollover distributions from an employer
plan. You can roll over more than one distribution from the
same employer plan within a year."

Then, in the section on Roth IRAs, I found this:
"You can convert a traditional IRA to a Roth IRA. The
conversion is treated as a rollover, regardless of the
conversion method used. Most of the rules for rollovers,
described in chapter 1 under Rollover From One IRA Into
Another, apply to these rollovers. However, the 1-year
waiting period does not apply."

It's clear that I can make as many withdrawals from my
employer plan and roll them over into an IRA as often as I
wish without being taxed. It seems I can also make as many
traditional-to-Roth IRA conversions as often as I wish. But
I'm confused whether I can rollover the balance of my
employer plan into an IRA, and within that same year convert
the entire IRA into a Roth IRA, while only paying taxes on
the conversion and not on the initial rollover (assuming the
conversion is not prohibited by the 1-year waiting period).

If there is a 1-year waiting period, when does it begin for
a direct rollover? The check was written by my employer at
the beginning of February, and deposited by my IRA custodian
at the end of April. This is slightly more than 60 days,
however the check was not endorsed to me but rather to my
custodian. Is this ok, or will I need to request an
exception from the IRS?

Thanks so much!
Pedro

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >