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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Re: 1998 Investments Date: 11/13/1998 2:49 PM
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MrGorsky asked:

<<I have a question regarding contributions made this year. I have a Traditional IRA that I was able to make tax-deductable 1997 contributions to. I also added a small amount this year. If I convert this IRA to a Roth, I am still able to deduct the contribution made this year if I meet the income requirement - correct? Also, what is that AGI. I think it is fully deductable ($2,00) for AGI less than 30K and non-deductable for an AGI over 40K - correct? I believe I will fall inbetween, so I was wondering if you could point me to where I could fine the "scale" for AGI between 30 and 40K.>>

Yes, you may deduct the 1998 contribution to your traditional IRA as you normally would; however, on conversion at least one-fourth of that amount must be claimed as income this year.

For those covered by retirement plans at work, the phase out range for deductible IRA contributions is $30K to $40K for single filers and $50K to $60K for joint filers in 1998. Below the lower limits, you may deduct up to $2K and above the upper limits you may deduct nothing. Within the phase out ranges the contribution is reduced to zero. To determine how much can be deducted, see the worksheet on page 12 of IRS Publication 590 (Individual Retirement Arrangements) which you can download at http://www.irs.ustreas.gov/prod/forms_pubs/index.html .

Regards....Pixy
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