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I am planning on converting my regular IRA to a Roth IRA. I have had my IRA for 2.5 years and since the 5 year waiting period is important to me I intend to do this:

I will amend my tax returns for the prvious two years and designate my IRA contribution as non-deductible by filing Form 8606.

My question is, will the holding period begin back at the IRA's inception or will it restart when I convert my earnings?

Can a mutual fund company do this type of conversion?

Thanks for all your comments...
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Greetings, Asidler, and welcome. You wrote:

<<I am planning on converting my regular IRA to a Roth IRA. I have had my IRA for 2.5 years and since the 5 year waiting period is important to me I intend to do this:

I will amend my tax returns for the prvious two years and designate my IRA contribution as non-deductible by filing Form 8606.

My question is, will the holding period begin back at the IRA's inception or will it restart when I convert my earnings?

Can a mutual fund company do this type of conversion?>>


You will gain nothing by doing what you propose except to pay a penalty on the income taxes you should have paid but didn't when you originally deducted the traditional IRA contributions. During a conversion to a Roth you must pay income taxes anyway, so why pay a penalty on top of that? Unless the conversion puts you in an extremely high tax bracket (unlikely given the information you have provided), then there's no advantage here. Additionally, the waiting period of five tax-years for the Roth starts with the first contribution to that Roth, not from the date you contributed to the traditional IRA.

As far as the conversion itself is concerned, any IRA provider can help you accomplish that action if you just ask them.

Regards..Pixy
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