Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Prior to 2011, neither my wife nor I had any Traditional IRA accounts. In early 2011, for tax year 2011, we each contributed to non-deductible Traditional IRAs and immediately simultaneously requested the accounts be rolled over/converted into our long-held, previously existing Roth IRAs. Our objective was what is often known as the "Backdoor Roth" strategy.

Due to a backup at our brokerage's central office, it took a couple of days for the roll overs to process. While the total amounts in the accounts at the time of the roll over/conversion was rolled over, the cash balances that had sat in the traditional IRAs for a few days earned $0.01 in interest, credited to the traditional IRA accounts at the end of the month of the conversion.

As a result, my wife and I each have $0.01 in our traditional IRA accounts based on the interest earned from the 2011 contribution.

The question(s): Does it make a hill of beans worth of difference if we wait until we make our 2012 contributions to roll over those pennies? Or is there some tax provision or paperwork simplification I'm not thinking of that makes it a better idea to roll 'em in 2011, in the same year as the original contributions? If it matters, we're both in our 30s.

Inside Value Home Fool

PS: I intentionally waited until after tax season to ask this, because it really seemed like way too small potatoes to bother folks with while deadlines were approaching...
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.