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Author: Crosenfield Date: 11/1/00 10:03 PM Number: 25909
"so what kind of tax penalties are we talking here? would it be based on your current tax bracket or something else? i'm asking because, i've thought about transferring over my traditional ira to a roth as well"

The amount transferred to a Roth is taxable income on the date of the transfer. So it will be added to your income next April and the applicable tax will apply.
You don't HAVE to transfer your whole traditional IRA, although you can do so.

I think there may be another situation here that has not been considered. If you have a traditional IRA and have been contributing $2000 per year, but you have not been deducting that contribution from your income taxes, (because your company has a qualified plan and you make more than the limit), then I think that since you have already paid the tax on your contributions, you could transfer that money into a Roth IRA and only have to pay tax on the gains that have been made since you contributed the money.

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