kamlet[at]panix.com (Arthur Kamlet) wrote in
news:gdnkq8$tl$1[at]reader1.panix.com:

- quote -

I need to pay attention to my return when all this is playing out.
Thanks for the heads up, Arthur, Phil, and Mark (hope I didn't forget
anyone, but thanks to you too!)

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <ajFLk.2948$r_3.2869[at]nwrddc02.gnilink.net> ,
Phil Marti <prm20871[at]verizon.net> wrote:
- quote -


Roth contributions are not reported on the 8606.



They might be reported on the 8880, retirement savers credit.


I agree with the possible disconnect.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Han" wrote:

- quote -

There's a disconnect here that continues to make me think you may have
messed up your calculations about the taxable income from your Roth
CONVERSION.

The 8606, Part I, is filed when either of the following happens:

1. You make after-tax contributions to a traditional IRA or roll same into
the IRA from an employer plan.

2. You take a distribution from your traditional IRA. Conversion to Roth
is treated as a distribution for these purposes.

You report a conversion to Roth in Part II of the 8606. In no case do you
report Roth contributions.

If you converted a portion of your traditional IRA assets to Roth, given the
fact that at some time in the past you made nondeductible contributions to
the traditional IRA, a portion of the converted amount is taxable and a
portion is a return of after-tax contributions. You do that calculation in
Part I of the 8606, then carry the taxable amount to Part II.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

kamlet[at]panix.com (Arthur Kamlet) wrote in news:gdm2ba$afd$1
[at]reader1.panix.com:

- quote -

Thanks, Arthur. I must have filed those forms somehow when I told TaxAct
that I made Roth IRA contributions ...

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

JoeTaxpayer <joetaxpayer[at]comcast.net> wrote in
news:gdm3sf$s1g$1[at]registered.motzarella.org:

- quote -



--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Han wrote:
- quote -

Mark was describing the process involved if you had any post-tax money
(i.e. non-deducted) in the IRA. If it was all pre-tax, his explanation
wasn't applicable to you.

For anyone who does have a mix - regardless of the number of accounts,
CDs, or investments within, you have ONE IRA, and keeping the post-tax
deposits segregated is meaningless, 8606 tracks the non-deducted amount,
and that's it. As Mark described, any conversion is prorated
pre-tax/post-tax money.

Joe

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Han wrote:
[...]
- quote -

You do not have to convert all of your total Traditional IRA balance in
one year, you can choose however much (100%) or little (0%) you like,
and are willing and able to pay tax on. It sounds like you have
converted just a portion of your total pre-tax IRA balance, and so will
only pay tax on that portion. Form 8606 (and accompanying worksheet, if
some of your Trad. IRA contribution was non-decutible) will walk you
through this calculation.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9B3ECF42AE627ikkezelf[at]199.45.49.11> ,
Han <nobody[at]nospam.not> wrote:
- quote -


Since you have both after-tax and before-tax contributions, you
should have filed a form 8606 every time you made a nondeductible
(after-tax) contribution, and every time you took an IRA
distribution.


The distribution is not taxable to the extent of the unrecovered
after-tax distributions. Form 8606 calculates this for you.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

kamlet[at]panix.com (Arthur Kamlet) wrote in
news:gdl5ht$4uf$1[at]reader1.panix.com:

- quote -

Form 8606? I'll have to look into that. Hopefully TaxAct or TurboTax
will help me with that ... I don't recall having a separate form 8606 in
the package for the last several years at least ... Am I bad now?

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Mark Bole <makbo[at]pacbell.net> wrote in
news:GzkLk.1316$8_3.1279[at]flpi147.ffdc.sbc.com:

- quote -

Life's a gamble ...

- quote -

Sorry, I lost you here. One of several IRA accounts I have is with
Citibank. Its total value is ~15K now. I instructed the Citi Smith
Barney rep to convert the whole account from a regular IRA to a Roth. I
will get a 1099R, hopefully marked appropriately as a Roth conversion. I
expect to "organize" (legitimately) funds from somewhere else to pay the
tax due. I didn't get the percentages you are mentioning, since it is
all of what is in a single account, though I have more accounts.

- quote -



--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Han" wrote:

- quote -

Just to be sure, as long as you converted all your traditional IRA accounts
to Roth, the taxable amount of the conversion is the total value at the time
of conversion minus the amount of after-tax money in your traditional IRA.
If you only converted a portion, you have to do additional calculations to
figure out the taxable part.

Oh, someone mentioned failed conversions in what was evidently a
misunderstanding of your OP. Don't worry about failed conversions. You
don't have one.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9B3E4602B30D4ikkezelf[at]199.45.49.11> ,
Han <nobody[at]nospam.not> wrote:
- quote -


So this means you use the last filed form 8606 in order to fill
out the new form 8606?


(Hint: If you answer no, Stop: Do not pass go! Do not collect $200.)
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

kamlet[at]panix.com (Arthur Kamlet) wrote in
news:gdjctu$pru$1[at]reader1.panix.com:

- quote -

I have kept the after-tax and before-tax contributions separate. TIAA
did separate out the small contribution I made in the early 70's which I
had paid with after tax dollars. I guess I'm in the clear then.

Thanks, Arthur!

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mon, 20 Oct 2008 21:53:50 EDT, Han <nobody[at]nospam.not> wrote:

- quote -

It depends on what the rules are when you finally draw on the Roth.


-HW "Skip" Weldon
Columbia, SC

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Han" <nobody[at]nospam.not> wrote in message
news:Xns9B3DCB39B68CAikkezelf[at]199.45.49.11...
- quote -

See "failed conversion."

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Han wrote:
- quote -

No, if you are going to convert, and can afford to pay the tax from
other funds not in the IRA, it's better to do it when value is lower
rather than higher. (Assuming, of course, that you expect it to go
higher again in the future -- a big "if"!)

Example: suppose you can "afford" to convert $20K (without pushing
yourself into a higher marginal tax bracket, and able to pay the tax on
the $20K with after-tax funds). If the total value of your Trad. IRA is
$100K, you have just converted 20%. If the total value of your IRA is
only $50K, you've converted 40% for the same out of pocket cost.

The flip side is, if you convert when the total value is very high, then
the value goes down later, you can potentially "recharacterize" the
conversion up to Oct 15th of the following year, a rare opportunity for
a "do-over" under the tax law.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9B3DCB39B68CAikkezelf[at]199.45.49.11> ,
Han <nobody[at]nospam.not> wrote:
- quote -


The taxable portion of the distribution is subject to ordinary income
rates.

If you had ever made nondeductible contributions, then by using form
8606 you can claculate how much of the distribution is not taxable.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

As I understand it, rolling over a traditional IRA into a Roth IRA means
that you have to pay tax on the value assigned to the cash and securities
on the day of the transfer. Are there any other qualifiers if the IRA has
for instance appreciably decreased in value? I thought I was doing the
smart thing in rolling over to a Roth now that stock valuations have gone
down considerably, or am I making a tax mistake?

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >