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Greetings, Billboss, and welcome. You asked:

<<my father in law just informed me that he has about 10,000 of non deductable ira money in his reqular deductable ira that he put in there years ago (BR) before roth how can he seperate this money and he wants to know if he can roll the 10,000 of non deductable money into a roth.>>

Sorry, but he can't do that. Traditional IRAs are aggregated for withdrawal purposes. When partial withdrawals are made, part of the money will be taxed and part won't depending on the ratio of deductible and nondeductible monies in all the IRAs to the market value of those IRAs.

Example: You have an IRA worth $15K funded by $10K of nondeductible contributions and another worth $15K funded by $10K of deductible contributions. You convert $10K of the first account to a Roth. For tax purposes, the IRS will look at the value of all your IRAs ($30K) and the total of your nondeductible contributions to those IRA ($10K). Divide $10K by $30K for the ratio of any withdrawal or conversion that won't be taxed. That's 33.3%. The rest gets taxed. You convert $10K, so $3.3K won't be taxed and $6.7K will be.

See IRS Publication 590, Individual Retirement Arrangements, for details. You can download that pub at www.irs.gov.

Regards..Pixy
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