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<<My son put $2000 into a regular IRA for 1997, for the first time. He wants to convert it into a Roth. He also wants to put $2000 into a Roth for 1998. The common advice is not to commingle the two resulting Roth IRAs. Apparently there's some tax advantage to keeping them separate. But will it make much difference, given that both IRA's are new and the conversion and new contribution will be made in the same year?>>

You are correct in surmising that it will make little or no difference if you keep these IRAs separate. But some brokerage houses are insisting on doing this (see my post from just a few minutes ago), so you need to make sure that whoever you are keeping the IRA with will permit this.

<<Another alternative could be - add $2000 for 1998 to the tradition IRA that was started in 1997. Then convert the combined IRA to a Roth. Is there any advantage or disadvantage to doing it that way?>>

No disadvantage, and possibly an advantage. If your son qualifies to deduct his contribution to a regular IRA he may be able to claim a $2,000 deduction in 1998, then take the rollover income over a period of four years. I'm not absolutely positive the IRS will permit this, but my discussions with people involved in developing the technical corrections act and guidance on the Roth IRA indicate that it may work this way.

KAT in Chicagoland
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