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They can do the work-around of making the TIRA contribution and then immediately converting it to a Roth. I'm a little surprised that the recent Tax Relief Act didn't close up this loophole. But they should keep in mind that when they do the Roth conversion, they have to take into account the full value of all of their TIRAs when determining how much of the conversion is basis (after tax contributions). So if they have sizable TIRAs with little or no basis, the conversion will be mostly taxable to them as ordinary income. Hence, this strategy would work best for those with small or no TIRAs.

But a Roth conversion for a given year must be done by 12/31 of that year. So they would now be able to do a Roth conversion for 2011 but not for 2010. TIRA or RIRA contributions can be made for a given year up until April 15 of the next year.

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