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<<I have heard (and understand) that all IRA money, even in multiple accounts is treated as a single IRA. But I'm wondering if this includes SAR-SEP(-IRA) money.

I have 2 IRA accounts, one has SAR-SEP and non-deductible IRA mixed (I know, bad idea -- it was the easiest way to deal with the fact that I'd over contributed to the SAR-SEP). The other has mixed deductible and non-deductible IRA.

I'm leaning towards converting everything to Roth, just to deal with the bookkeeping nightmare now, and not have to worry about it in the future (I'm 25 now, so I could potentially put it off for a long time).

What I'd really like to do is convert all but the SAR-SEP (it was deductible in my state, and I'll probably be moving in a couple of years -- so I'd like to avoid state taxes on it if possible).

I know that I can't convert the SAR-SEP until I roll it into regular IRA, so I'm thinking that this type of IRA is not lumped in with the rest. Does that sound right?

Does anyone know of a good reference (book, article, website, whatever) on dealing with mingled deductible & non-deductible IRAs? The only ones I've found so far have said don't do it, but it's too late for that :( >>

If you ever find that book, let me know. As to your question re the aggregation of the SAR-SEP with your other IRA to compute the taxable portion of a conversion to a Roth, I really don't know. The SAR-SEP is treated in many respects as a qualified retirement plan and in others as a regular IRA. My guess (and it's only a guess) would be it will be treated as an IRA for that purpose. That's because you are free to transfer that money to another IRA at any time, just as you are in any other IRA. You may want to ask this question of TMF Taxes in the Tax Strategies folder. He may have the skinny on this one.


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