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URL:  http://boards.fool.com/pjgeorge-writes-in-part-if-i-roll-my-401k-11030325.aspx

Subject:  Re: 401(k) to IRA rollover question Date:  7/9/1999  1:14 PM
Author:  Bob78164 Number:  11864 of 78165

PJGeorge writes (in part):

If I roll my 401(k) into a traditional IRA, and then into a Roth IRA I pay taxes on the full 73K like it was income?? If so, that'll put me in the 33% tax bracket and I'll only have about 49K to put in my Roth IRA.

I reply:

I infer from this passage that you would pay the taxes from the funds to be converted. If so, then the case for conversion to a Roth IRA in your cicumstances is even worse than you've made it out to be. The withdrawal in order to pay taxes would be a premature distribution, and so would be penalized an additional 10%.

On the other hand, you are entitled to convert