Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: IMBonzi Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Converted Just One of Two IRAs to a Roth Date: 6/24/2013 1:27 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
After learning that having two IRA accounts and converting only one of them to a Roth creates ongoing tax problems, I recharacterized the IRA contributory to Roth conversion that I made in 2012. Unfortunately I learned about the problem at the last minute and, though I gave online instructions to my broker to transfer the money back to my IRA before April 15, 2013, the transfer was not completed until April 15th. I received a Form 5498 for the IRA to Roth conversion.

Turbotax does not seem to recognize the problem of converting just one of two IRA accounts to a Roth. It must recognize that something is wrong, however, because it tells me I will have to pay a penalty for having too much income to have made the conversion in the first place. I contacted Turbotax, but neither of two TT representatives I spoke to was able to keep TT from indicating I have to pay a penalty for the conversion and neither was aware of the arcane two IRAs problem, which I also was unaware of when speaking to them.

Should I manually fill out the 8606 as I have in other years when making an IRA to Roth conversion before having two IRAs (the second came about this year as a conversion from a retirement plan).

Can I avoid the IRS assessing me an added tax resulting from the conversion that didn’t get recharacterized before April 15th?

Thanks, ever so much for any help.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev Thread | Prev | Next | Next Thread

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.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
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.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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