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That's helpful to me thanks! And to finish my questions, I don't have to convert everything as long as we use all our IRA holdings to determine basis and therefore taxes on what we do convert. Right?
For example, say we have $500K in IRAs, 2 x $50K TIRAs and 2 x $200K Rollover IRAs. We could convert the two TIRAs, say $20K/yr for 5 years - and leave the Rollover IRAs as is (again, as long as we use all remaining for basis/taxes).
I know you asked Alan, but I'll chime in if you don't mind......
Yes, you have it correct. You definitely do not have to convert all your TIRA's but, yes, the aggregate value of all your TIRAs is used in the calculation.
Your IRA administrator (Schwab for me) will send you a 1099 stating the amount you converted. TurboTax asks you for a few numbers (as illustrated by Alan) and you're done.
Edit: Just thought of a possible point of confusion....... you and your DW's transactions are handled completely separately despite you filing MFJ. If you convert from both of your TIRAs, you'll each get a 1099 and will use your own numbers to calculate the taxable portion. Then the taxable portions of both 1099 amounts will be added to your taxable income, assuming MFJ.
BTW, an advantage to not rolling over a 401k to a rollover IRA is that 401k's are not included in the calculation. That's why I'm delaying the rollover of my 401k until I complete the TIRA to Roth conversions that I want to do.
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