Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Q. Do you include the rollover amount when calculating the $100K limitation amount?

A. The new Code section doesn't give you an answer. There are 3 possibilities (1) the entire amount is included, (2) only 1/4 of the amount is included or (3) none of the amount is included.

The Committe Reports (in a footnote 51 to the Conference Agreement) state that "For this purpose, AGI is determined before any amount includible in income as a result of the rollover or conversion."

A strict reading of the Code would require you to include it all. This cannot be the intent because anyone with a sizable IRA would be precluded. Including 1/4 for the limitation test doesn't make sense because you have to qualify for the rollover before you are allowed to only include 1/4 of the rollover in AGI. Thus, the only logical answer (which is supported by the Committee Reports) is don't include it in the AGI limitation.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
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.