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Bifurcation of a Non-Deductible IRA


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My non-deductible IRA has a balance of $200,000. I wish to do a Direct Rollover as follows: The $70,000 of non-deductible contributions will go into a Roth IRA and the $130,000 of earnings will go into a Traditional IRA. Is this permissible?



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No you can't do it that way. You need to pro-rate the basis between the two.

There might be a workaround - You might be able to roll the $130,000 of earnings to a qualified retirement plan and then convert the remaining balance to a ROTH-IRA.

Taxwise that would accomplish what you want but investmentwise it may not and you need to have a qualified plan you want to roll the funds into.

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