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<< I've checked out the FAQ and the boards for the last couple of months and have a couple of questions that I've not seen answered. If they have and I've missed them then I apologize in advance. >>

Thank you for trying. Especially this time of year, we really appreciate it.

<< My situation is this. I've had to file this year as MFS due to an impending divorce. I live in a non-community property state (NJ). In 98 I started a Roth IRA. I have a pension and annuity from the union so I don't qualify for a standard IRA. I continued to contribute to the Roth in 99. However, in doing my taxes this year I discovered that by making 60k I do not qualify for a Roth. So, I have over contributed.
My questions are as follows. Can I roll my 99 Roth into a non-deductable IRA? If so, how do I go about figuring out how to divide up the gains that I made in 99 and 2000? That is, I have made some gains on the investments in the Roth and now do I have to figure out the percentages of the gains and roll that into the non-deductable 99 IRA or leave all but the $2000 99 contribution in the Roth? >>

What you want to do is "recharacterize" your 1999 contribution and the earnings on it to a traditional IRA. Your custodian can handle it for you with a simple form and has a formula for allocating the earnings which must go with the contribution. You'll report all this on Form 8606, probably with an explanation attached. Read the instructions carefully. You may also want to go to the FAQ index, click on the "IRA" link, and search on "recharacterize." The last time I checked, it yields seven articles.

Phil Marti
Tax Preparer
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