"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

Thanks, Phil and others.

I think I understand that part now. My basis is the
combined after tax contributions of _all_ of my IRA's. That
basis is divided by the total of all my traditional IRS's to
get a multiplier that pro-rates the tax exempt portion of
the distribution.

Too bad, but not a reason not to start converting to a Roth
while my tax bracket is low - just have be be careful not to
convert too much and push the bracket back up.

--
-Ernie-

"There are only two kinds of computer users -- those who have
suffered a catastrophic hard drive failure, and those who will."
Have you done your backup today?

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"Ernie Klein" <ecklein[at]pacbell.net> wrote:

- quote -

No. When there are after-tax contributions to a traditional
IRA all distributions, including conversions to Roth, are a
combination of previously-taxed contributions and untaxed
contributions and earnings. You do this calculation in Part
I of Form 8606.

--
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 (2006) - All rights reserved. > << ================================================== ===== >

Ernie Klein <ecklein[at]pacbell.net> writes:

- quote -

No!

- quote -

No!

The conversion is just as taxable as any other distribution
from a traditional IRA. The only difference is that the 10%
early-withdrawal penalty doesn't apply to a conversion.

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

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Ernie Klein wrote:

- quote -

Sorry, you can't do that, unless your traditional IRAs ONLY
consist of after-tax contributions. If you have had them for
any length of time they likely also consist of TAXABLE
earnings.

When you convert a TIRA to a Roth IRA, you first take a
distribution from the TIRA. You cannot just distribute the
after-tax funds but must take pro-rata amounts of pre-tax
and after-tax funds in ALL your IRAs. This also includes
accumulated earnings. In virtually all cases, you WILL
increase your AGI and have a tax liability.

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >

Since I am retired, my income is now low enough to make me
eligible for a Roth IRA.

Am I correct that I can convert all of my after tax
contributions in a traditional IRA to a Roth IRA and it will
not affect my AGI (i.e. the distribution will be canceled by
the after tax amount)?

In other words, can I convert all of my after tax money to a
Roth without incurring any additional tax or cost?

And would there be any reason not to, since a Roth is not
subject to mandatory withdrawals after 70.5 and I am getting
closer to that age than I like to think?

(I have a related question, but will ask it under a different subject.)

--
-Ernie-

"There are only two kinds of computer users -- those who have
suffered a catastrophic hard drive failure, and those who will."
Have you done your backup today?

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >