Roth Conversion & Contributions in same account?

[summerblues]

I want to convert some of my traditional IRA to a Roth. I already have a Roth account that is made up of regular Roth contributions. If I do a conversion can the conversion amounts go to my existing Roth account? I understand that there are different 5 year distribution rules for regular Roth contributions verses Roth conversions so I'm wondering if conversion funds need to go to a separate Roth account?

 

[SecondCor521]

You may use the same account. If you take distributions from your Roth prior to 59.5, then you will need to keep track of your contributions and conversions by year. Those distributions are deemed to be from contributions first (oldest to newest), then conversions (oldest to newest). Anything else is earnings and it comes out last.

You can use a different account (or accounts) if you want, but I don't think there is much advantage, if any, in doing so. I would think it a hassle to set them up with your custodian and then make sure that all the conversions you want are going into the right account(s). However, the IRS treats all of your Roth IRAs as a single large Roth IRA for tax purposes, so it's not required from their point of view.

 

[summerblues]

You may use the same account. If you take distributions from your Roth prior to 59.5, then you will need to keep track of your contributions and conversions by year. Those distributions are deemed to be from contributions first (oldest to newest), then conversions (oldest to newest). Anything else is earnings and it comes out last.

You can use a different account (or accounts) if you want, but I don't think there is much advantage, if any, in doing so. I would think it a hassle to set them up with your custodian and then make sure that all the conversions you want are going into the right account(s). However, the IRS treats all of your Roth IRAs as a single large Roth IRA for tax purposes, so it's not required from their point of view.

Thank you for that info. Very helpful. My brain has gotten bit fried from all the IRA rules....