loopy4 writes:Q1. I have a 401k from a previous employer that I left in Feb. 1998. I would like to transfer it into a IRA and give the Foulish Four a whirl. As I understand it no taxes but I cannot transfer again for 12 months?Q2. I would like to open a Roth IRA or a Traditional IRA and contribute the max, I currently do not qualify for an employer sponsered plan but my wife does, can I do this? Would I even be able to deduct a Taditional IRA contribution given the rollover this year? Any ideas would be apprecieated.I reply:Welcome to the boards! As to your first question, as long as you move the money via custodian-to-custodian transfer, you may move it as often as you like. Just ask your new custodian how to do this; it will have both the forms and the expertise to handle the move easily. The time limitations only apply if you take possession of the money and then roll it over to an IRA within 60 days. This procedure is emphatically not recommended.Regarding your second question, the rollover has nothing to do with whether you may deduct a traditional IRA contribution. Since your wife is covered by an employee-sponsored plan, I believe that your ability to deduct your contribution is phased out, but I don't know the phase-out range and I may be wrong about this. You may contribute to a Roth IRA as long as your modified AGI does not exceed the $150,000-$160,000 phase-out range.One other thought. If you already have a traditional IRA with a non-zero basis that you are considering converting to a Roth, you want to do so before transferring your 401(k) money. That's because the transfer will "dilute" your basis, making more of the conversion taxable. I don't remember precisely how it works, but it may even be necessary (if you want to go this route) to defer the transfer until the year after your conversion in order to avoid the dilution effect. Good luck! --Bob
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