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IRA rollover
Old 02-06-2007, 08:49 PM   #1
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IRA rollover

It looks like the IRS will allow direct rollovers from 401k type accounts to Roth IRAs beginning in 2008.


http://www.irs.gov/pub/irs-tege/rollover_chart.pdf
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Re: IRA rollover
Old 02-06-2007, 09:16 PM   #2
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Re: IRA rollover

Yes... But taxes are due. I wish we could roll only the after tax portions. Oh well... Conversion will work it just takes planning and time!
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Re: IRA rollover
Old 02-07-2007, 01:49 AM   #3
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Re: IRA rollover

This may seem self-evident, but I would like to be sure. In the roll over from qualified plan to .. can you split that between Roth IRA and regular IRA. Wouldn't seem to make sense that you have to only roll to one type of account, but with the government, I thought I'd better ask.
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Re: IRA rollover
Old 02-07-2007, 06:55 PM   #4
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Re: IRA rollover

Isn't the math on that funny though? Like when you do a conversion to a Roth, and you already had some money in one, your tax amount is calculated based on the total amount of ALL your IRAs when you do the conversion.

Entire topic makes my head hurt when I read about it
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Re: IRA rollover
Old 02-07-2007, 08:54 PM   #5
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Re: IRA rollover

Quote:
Originally Posted by NinjaPigeon
Isn't the math on that funny though? Like when you do a conversion to a Roth, and you already had some money in one, your tax amount is calculated based on the total amount of ALL your IRAs when you do the conversion.

Entire topic makes my head hurt when I read about it
Can you explain this more ?

Thanks !
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Re: IRA rollover
Old 02-07-2007, 09:31 PM   #6
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Re: IRA rollover

Helen,
I think what NinjaPigeon might be thinking about is when you make withdrawals and/or Roth conversions from traditional IRA's AND you have made a combination of after-tax and before-tax contributions to those traditional IRA's.

Each W/D or conversion is considered to come from both the after- and before-tax pots.

For example, suppose you deposited $3000 in an after-tax traditional IRA and $6,000 in a before-tax traditional IRA over the years. Then you decide to convert $3000 to a Roth. Then $1000 of that conversion will be treated as coming from after-tax contributions (because 3000/9000 or 1/3 of the original contributions were after-tax) and $2000 will be treated as before-tax (6000/9000 or 2/3). This is true even if all $3000 of your conversion came from the after-tax account, because all IRA's are lumped together for this computation.
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Re: IRA rollover
Old 02-07-2007, 10:08 PM   #7
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Re: IRA rollover

Quote:
Originally Posted by NinjaPigeon
Isn't the math on that funny though? Like when you do a conversion to a Roth, and you already had some money in one, your tax amount is calculated based on the total amount of ALL your IRAs when you do the conversion.
Entire topic makes my head hurt when I read about it
When I complained about this once on Ed Slott's IRA Help forum, about six CPAs stomped on me for being too anal retentive analytical nuclear about it and told me to just plug through Form 8606.

They were right.
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Re: IRA rollover
Old 02-07-2007, 11:13 PM   #8
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Re: IRA rollover

Thank you, Gindie. I forgot about traditional IRAs.
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