multiple backdoor roth conversions in one year...

[Lazyfabs]

this is two part question. as fyi, all accounts are held at Fidelity. i am also maxing out + catch-up with my 401k. filing as married/joint and our MAGI is above the income limits to make deductible Trad/Roth contributions.

A) in jan 2021 i made a $7000 (over 50) non-deductible cash contribution to my Trad IRA and the following day i backdoor/rolled it over to my Roth IRA. I have been doing this for several years now, pre/post turning 50.

? - can i make another non-deductible Trad IRA and subsequently backdoor/roll it over to my Roth IRA OR am i limited to the max amount of $7000/year?

B) i currently hold etf (Fidelity Energy FENY) in my brokerage account. some of the shares are in short term gain status and all have some LT/ST) gain. no chance to do tax-loss harvesting w/ this holding.

? - can i contribute/transfer etf FENY shares as a non-deductible contribution into my Trad IRA and then subsequently backdoor/roll it over to my Roth IRA as shares OR does the transaction need to be in cash?

(this question if i can do a non-deductible contribution over the $7000/yr limit). also, w/ this particular holding since i am unable to do tax-loss harvesting would like (if i can) place into my Roth so any future dividends are in a tax advantage type of account.

thank you all for any insight.

 

[cathy63]

You are limited to $7000 per year combined contributions to the tIRA/Roth accounts. You've already maxed out your $7K contribution to the tIRA, so you're done for the year.

I think IRA contributions have to be in cash, but I'm not sure if that's a broker requirement or an IRS requirement. Ask your IRA custodian what they can accept as a contribution.

 

[Dash man]

You are limited to $7000 per year combined contributions to the tIRA/Roth accounts. You've already maxed out your $7K contribution to the tIRA, so you're done for the year.

I think IRA contributions have to be in cash, but I'm not sure if that's a broker requirement or an IRS requirement. Ask your IRA custodian what they can accept as a contribution.

Cathy63 is correct. IRA contributions have to be in cash. However, stock from a traditional IRA can be moved in kind to a Roth account. You just have to pay the taxes with another source.

 

[TheWizard]

Cathy is correct on the maximum $7000/year CONTRIBUTION limit to either type of IRA.

Additionally, you can do unlimited Roth CONVERSIONS of money that was previously tax-deferred, meaning in an IRA, 401(k), or 403(b).

Use an employer 401(k) or a SEP-IRA or a Solo 401(k), depending on your situation, to tax-defer additional funds in the current year, up to their limits...

 

[Lazyfabs]

limits is what i figured, but read some changes were made to IRA via secure act and wanted to make sure. thanks for responses/clarifications.

 

[cxr133]

Cathy is correct on the maximum $7000/year CONTRIBUTION limit to either type of IRA.

Additionally, you can do unlimited Roth CONVERSIONS of money that was previously tax-deferred, meaning in an IRA, 401(k), or 403(b).

Use an employer 401(k) or a SEP-IRA or a Solo 401(k), depending on your situation, to tax-defer additional funds in the current year, up to their limits...

where can i find more information on this strategy.? was the original question just about funding a IRA to max 7000 yr for additional savings.

or was there some tax deffered rstrategy for taking funds from 401K (403B, 457 )and transferring over to IRA for > 50? over multiple years?

Thanks

 

[Lazyfabs]

where can i find more information on this strategy.? was the original question just about funding a IRA to max 7000 yr for additional savings.

or was there some tax deffered rstrategy for taking funds from 401K (403B, 457 )and transferring over to IRA for > 50? over multiple years?

Thanks

op here,

i superficially read about changes to ira's due to secure and/or care act, but didn't dive deep enough into specifics and ? was in regards to making non-deductible trad ira contributions beyond the $7000/yr limit to then do a backdoor roth conversion.