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Subject:  Re: Roth IRA transfer Date:  4/25/1998  11:54 AM
Author:  TMFPixy Number:  3031 of 98496

Greetings, Hare, and welcome.

<<I am considering moving a 6 figure IRA to a Roth IRA, paying income taxes on gains now vs. 14 years from now when I access money. Reason for this is I expect minimum income tax rate in 98. Sooo, what say you fools. I dont know whether to pay Uncle Sam now at 15 percent tax on gains or pay in 14 years at who knows what! Input is much appreciated.>>

As others have pointed out, when you convert that IRA to a Roth the sum must be declared as income ratably over the next four years. At six figures, that's at least $25K per year, and it will be taxed at the marginal rates in effect in those years. That may or may not be in the 15% bracket depending on your other income.

Also, you should consider how you'll pay those taxes. If you expect to take the taxes from the amounts being rolled, then almost certainly you're better off leaving the money in the traditional IRA. See the information at for additional details.


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