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I'm sure you'll get a more thorough and professional response from TMFTaxes or KAT, but I'll share my thoughts on the subject.

I have opted for the second alternative that you outlined: to add $2000 for 1998 to 1997's $2000, then convert the $4000 IRA to Roth. I believe the advantage to this is that I will be able to have one pot of money to work with for my ER4 (thanks!). This will make it easier to keep the amounts evenly distributed across all four stocks at rebalance time.

To the best of my knowledge it is not just possible, but very strongly recommended, to keep converted Roths separate from contribution Roths. I believe this has to do with computing the 5-year holding period, which is done differently for conversion vs contribution.

BTW, I appreciate all your good work, Elan, so here's hoping that you keep at it!


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