Skip to main content
No. of Recommendations: 1
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.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
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.
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.