Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Y2K Roth Contribution Limit Date: 1/1/2000 2:41 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
BladeXrunners writes (in part):

If you guess wrong, you can "recharacterize" it into a traditional IRA, obviously the contribution will be non-deductible if your AGI is that high. "Recharacterize" means to treat the contribution as though it was original made to the traditional IRA.

Or you can withdraw the contribution and all its earning. If you do this by the due date, including the extension, then it treated as though it had not be contributed. Unfortunately, I haven't seen any IRS guideline for how to calculate "its earning", so good luck.


I reply:

A couple of comments. First, no matter how high the original poster's AGI is, if he/she is not a participant in a qualified retirement plan at work, a traditional IRA contribution will be deductible. Second, Vanguard, for one, will calculate the earnings for you; in fact, in my case (a mutual fund), they insisted. There doesn't seem to be any need to segregate the 2000 contribution. --Bob
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement