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Pixy writes:

<<Your belief is 100% correct. The conversion has no impact on your ability to make an annual contribution to a Roth. You may still contribute up to $2K this year to a Roth and that contribution legally may be made to the conversion IRA you opened with Fidelity. Administratively, to me that makes sense. However, Fidelity may say the IRA agreement you signed for the conversion account says you will not make annual contributions to that account. If so, just be persistent and, if necessary, threaten to move the conversion account to a provider who will allow contributions. Other than the fact Fidelity may be following now out-dated guidance from the IRS, there's absolutely no reason a conversion and contributory Roth IRA must be separate. My guess is they won't prevent you from doing so despite what the inittial IRA agreement says.>>


Thanks for your reply. I've contacted Fidelity about this and received a response that I found less than satisfactory. Here is the relevant portion of their response for everyone's edification:

<<Although the IRS does not require that Roth IRA contributions and conversions be kept separate, we still maintain separate registrations for these account types. For recordkeeping purposes, we are not currently allowing Roth IRA contributions to be made to conversion accounts. If you would like to contribute to a Roth IRA, you will need to establish a Roth Contributory IRA. We are sorry for any inconvenience this causes you.>>

So, according to this, I'll have to maintain two Roth IRA accounts (with two annual fees and double the commissions if I do any trading). All this for no better reason than their 'internal recordkeeping'. I'm crafting a response to this nonsense now. I'll let everyone know how it turns out.

Anybody out there know of other brokerages (besides Ameritrade) which currently *do* allow mingling of conversion and contributory money? I figure the more I can scare them with competitor's names, the better...

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