Skip to main content
No. of Recommendations: 0
I put this on the Tax Strategies board, but I think I might get some advice here too...

Hi everyone. I have a slightly complicated situation and I'd like a little help.

In 1996, when I turned 21, I received $2000 in a tradtional IRA as a gift from my father. I did not contribute anything for the next 3 years but I invested some of the money within the IRA. Last year (March 1999) I converted the IRA to a Roth IRA. There was about $3000 in the account at the time. Now the same Roth IRA is worth about $5000.

My question is: Because of the conversion I'm sure I have to pay some taxes, but since the original $2000 was a gift, how much do I have to pay taxes on?

Any advice or pointer to where I could find help would be much appreciated.

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.