Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: madmikeyd Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Yet Another Roth IRA Conversion Date: 1/10/2002 3:12 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hello Fellow Fools,

In October 2000 I opened, and made a $2000 deductible contribution to a traditional IRA. In January of last year, I made another $2000 contribution, which I now see will be non-deductible as a result of the 403(b) plan which my employer since August offers - so I am evaluating conversion to a Roth IRA.

As a result of some unFOOLish investments decisions, and the downturn in the market the IRA is now only worth $2873.81.

(1)
If I converted, what would be the tax liability? $873.81? ($2873.81 - the $2000 nondeductible contribution?) $2000? (The full value of the deductible contribution?) Would it be the current market value of the 2000 contribution?

(2)
(Whether this is relevant would depend on the answer to question 1.)
Could I file an amended 2000 tax return and NOT take credit for the $2000 deduction? (Essentially unscrambling the egg of the deductible IRA contribution.)

(3)
Is the tax liability of a conversion completely dependent on calendar year, or could I convert today, and have the penalty occur in my 2001 taxes?

Thanks for the help!

Cheers,
madmikeyd
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Disclaimer:
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.
Post of the Day:
Berkshire Hathaway

Brookfield Asset Management
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement