The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Conversion to Roth IRA Date:  11/26/1997  4:43 PM
Author:  TMFPixy Number:  655 of 88517

Greetings, Dwiess3, and welcome.

<<Do I understand the new regs correctly? If a married couple have combined AGI greater than $100,000 then they can't convert existing nondeductable IRA's to Roth IRA's? However, if that same couple were to divorce, then each individual could convert his/her nondeductable IRA to a Roth IRA so long as his/her INDIVIDUAL AGI is less than $100,000? This seems unfair to married couples. Also, does the AGI limit apply to the tax year in which the conversion is made or to the prior year? If it is the current year, and your expected income is near the threshold, do you have to wait til the end of the year to make the conversion, when you know what your capital gains distributions, etc, will amount to? >>

You understand the issues correctly. The $100K applies to couples as well as to singles. As to the unfairness of that, you'll have to ask the Congress.

The limit is for the year in which the contribution will be made. The IRS has yet to say what they will allow regardingf rollovers that inadvertently exceed that limit. Until you know the precise rules, your best bet when you're near that AGI limit is to do nothing until you see what the IRS will permit in this area.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us