Hello everyoneI opened a Traitional IRA(without deductable) for the year 2000 in May. The reasons I opened Tradition IRA are1) I am contributing to my 401K2) Since all of my stocks were doing great during that period I thought my total income would exceed that $120,000 figure ,which prevents me from contributing to Roth IRA,if I sell them this year.Well ,now all of my stocks hitting the bottom everyday and I have no plans to sell them this year so I now have the oppurtunity to contribute to Roth IRA fully($2000). Since I can't open one more IRA for year 2000 ,can I convert my existing Traditional IRA to Roth IRA and trade the stocks and never pay the taxes.lessons learned hardwayRama
Yes, you can convert your traditional IRA to a Roth IRA, but you will have to pay income taxes on any amounts converted in the year they are converted. Thereafter, you can trade stocks in the Roth and never pay taxes on the Roth (assuming distributions are taken according to the rules usually after age 59-1/2).
Since I can't open one more IRA for year 2000 ,can I convert my existing Traditional IRA to Roth IRA and trade the stocks and never pay the taxes.You can convert any portion of a traditional IRA to Roth in any year in which your AGI is under $100,000.You have another option with respect to the year 2000 contribution, and it's one you should use if the account has gained value. You "recharacterize" the year 2000 contribution (and the earnings on it) as a Roth IRA contribution. Your IRA custodian should have a simple form for this.TMF ExROPhil Marti
Yes, you can convert your traditional IRA to a Roth IRA, but you will have to pay income taxes on any amounts converted in the year they are convertedActually my $2000 is now worth $310. Yeah that is right. Since I actually lost the money I am afraid I do not have to pay any taxes ,right?. Should I just call my broker and ask him to convert Regular into Roth IRA. Is that all I need to do.ThanksRama
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