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Subject:  Re: Roth Contributions Date:  9/26/1998  11:05 AM
Author:  TMFPixy Number:  5657 of 88066

GeekFoolBoy asks:

I think I know the answer to this, but I want to double-check with you nice people to make sure I'm not going to do something foolish when I'm trying to do something Foolish.

This year I changed jobs and rolled my 401(k) to a Rollover IRA which I have subsequently converted to a Roth Conversion IRA (held by Fidelity).

Now, before the tax year is over, I want to make an additional contribution to my Roth. So my questions are:

1) Am I allowed to make the contribution having done a conversion this year?

2) If so, are there any limits on the amount I can contribute (except the obvious 2,000 annual limit for Roths)? I contributed to my 401(k) from January to May of this year.

I believe that for my situation, I'm allowed to make the full 2,000 Roth contribution this year and I can put it in the same Roth that I converted. Is there any reason I wouldn't want to do this?

Your belief is 100% correct. The conversion has no impact on your ability to make an annual contribution to a Roth. You may still contribute up to $2K this year to a Roth and that contribution legally may be made to the conversion IRA you opened with Fidelity. Administratively, to me that makes sense. However, Fidelity may say the IRA agreement you signed for the conversion account says you will not make annual contributions to that account. If so, just be persistent and, if necessary, threaten to move the conversion account to a provider who will allow contributions. Other than the fact Fidelity may be following now out-dated guidance from the IRS, there's absolutely no reason a conversion and contributory Roth IRA must be separate. My guess is they won't prevent you from doing so despite what the inittial IRA agreement says.


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