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Financial Planning / Tax Strategies
|Subject: Re: Roth conversion - 4yr spread||Date: 2/6/2000 7:33 PM|
|Author: TMFTaxes||Number: 27541 of 124471|
<< I converted my $16k IRA to a Roth IRA in December 1998. I elected to spread out the reported income over 4 equal annual tax payments. I made the first payment on $4k on my '98 taxes.
This year, due to a military deployment overseas, my reported taxable income is only ~$15k. Is there any way to include my final 3 payments of $4k each (total $12k) to my 1999 taxes, thus taking advantage of my unusually low income for the past year? I was thinking maybe I could convert Roth IRA to a conventional IRA then back to a Roth IRA- would that work, or is there another way? >>
As Phil points out, once the election is made, it's irrevocable. The only way that you could report the remaining spread income this year would be to take a distribution of $8k of the funds from the Roth IRA...which would remove the funds from the Roth IRA and would also subject you to penalties on $8k of conversion...or about $800.
So this is something that I'm sure that you don't want to do. So you're simply stuck with the spread out.
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