In June 1998, I converted a traditional IRA, then made a $2,000 1998 Roth contribution to the same account. I want to make a 1999 Roth contribution in the near future, but there is a (small) chance that my 1999 AGI will exceed the limit. I assume if my AGI did exceed the limit, I could convert my 1999 Roth IRA to a traditional IRA. Should I go ahead and make the contribution now, but to a separate IRA account? Thanks for any advice.

You are correct in assuming that you can "recharacterized" your 1999 Roth IRA contribution to a traditional IRA contribution if you find out that your MAGI is too high. The recharacterization must be done by your tax return due date (4/15/2000) and must be done by way of a trustee-to-trustee transaction. Since the income relating to the recharacterized amount must also be recharacterized (moved from the Roth to the traditional IRA)it will make it easier for you to determine that amount if you make the contribution to a separate Roth IRA. However, there is no other reason that I can see to maintain separate accounts. Furthermore, the financial institution that has your Roth should be able to help you determine the related income if you do have to move the money.

I disagree that the financial institution will help you determine the income if you commingle the account. I would not trust them to do a required minimum distribution, which is a much simpler calculation than related income on a recharacterization.

Go for the separate account. It's safer and simpler.

Hey, wait a minute - some of us do have a clue and will bend over backwards to make sure our clients stay out of trouble and do things right. Please give credit where credit is due.