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Author: wrndln Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121328  
Subject: Transfers to Roth IRA Date: 10/1/1997 8:52 PM
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I have several IRA accounts, of which 2 of 3 contain non-deductable contributions. My question is: Can I convert just one or two of these IRA's to Roth IRA's next year or is it all IRA accounts or none? Also, assuming I can convert one or two of the IRA's with non-deductable contributions, how would I handle the 8086 form and how would I figure how much tax I owe?

Thanks for any help.
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 447 of 121328
Subject: Re: Transfers to Roth IRA Date: 10/3/1997 12:26 PM
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<<I have several IRA accounts, of which 2 of 3 contain non-deductable contributions. My question is: Can I convert just one or two of these IRA's to Roth IRA's next year or is it all IRA accounts or none? Also, assuming I can convert one or two of the IRA's with non-deductable contributions, how would I handle the 8086 form and how would I figure how much tax I owe?>>

There is nothing in the law that prohibits you from rolling over only a portion of your IRA account. But remember that even though you may have many IRA accounts, you really have only one IRA.

If you make only a partial distribution to the Roth IRA, you'll have to spread your basis in your IRA (as you would in a regular distribution) based upon your computations on Form 8606.

But once the funds are in the Roth IRA, you are able to withdraw contributions FIRST. So if you have non-deductible contributions in your regular IRA that get rolled over to a Roth IRA, you may then be able to withdraw those contributions first, without tax, and penalty free. BUT...this is a loophole that the Congress is expected to fix in the near future.

TMF Taxes
Roy

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