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Unfortunately, yes. Too bad the answer won't be as clear. If all of her past IRA/403(b) contributions were pre-tax (that is, deductible when made), then the answer is easy. All amounts converted to a Roth IRA will be taxable income to her in the year of conversion.

They are all pre-tax and I assumed this would be the case.

If I understand MO taxes correctly, the first $6000 of conversion income will be tax-free. This doesn't reduce the taxes on your income or divert some of it to your wife, but it does allow you to get money into the Roth for her. Whether that's a good thing or not really depends on your long-term expectations -- will you be in a higher tax bracket in retirement than you are now, will you need to draw on your IRA in retirement, do you plan to leave your IRA to your heirs, etc.

I see your point. I may have been trying to be too clever.

FTR, how do you arrive at the conclusion that the first $6,000 would be (MO) tax-free? My understanding is that it would get lumped in with other income and, since her other income is small, would just get taxed at rates below the top bracket. I fully admit I might be missing something obvious here.

However, if any of her previous contributions were after-tax dollars, a typical conversion will be partly taxable and partly tax-free.

Thankfully, we don't have to deal with this.

Thank you very much for your help and your time.

--B+C
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