How many times can you convert one or more Traditional IRAs that you might currently own (or create in the future) over to a new or existing Roth IRA?

[Guest phactor]

I've perused hundreds of web sites including irs.gov and can't find the answer anywhere. I've read where you can contribute your Trad IRA funds a little at a time to ease the tax consequenses, and I'm fully versed in the pros/cons of Trad vs Roth; "you must mind your personal circumstances, Roth dollars are bigger, you must take into count tax brackets, depends on current age and expected retiring age..." all of this I know.

Here's why I ask. Yearly, I plan to build a Traditional IRA, and at each year's end, roll it over into a Roth. After a reply or two, I'll gladly explain why I would not just contribute all to the Roth in the first place.

You see, for me, a Roth makes the most sense, and it will for many years to come. Therefore I wish to convert each year's newly created Trad IRA money into my Roth. Where can I find sites / publications that cover repeated conversions (over several years and with several subsequent Traditional IRAs)?

Thanks in advance! - Phil

[BPickerCPA]

I worked extensively with Roth IRAs, and I can't imagine why you would not contribute directly to the Roth.

Why don't you share that with us first. If you have some angle I haven't thought of, I'll thank you. On the other hand, if you are operating under some misconception, we can explain that to you.

[John G]

Sounds like a misunderstanding of the mechanics. You are suggesting a two step process when a direct contribution to a Roth is simpler. If your IRA grew during the year, you would pay taxes on the conversion on anything over the contribution... hard to see why that is a good idea.

I too am interested in the "angle". Please post again.

[Guest phactor]

To be honest, I first need web sites / publications that discuss repeated Trad IRA conversions over to Roth instruments, regardless of how the Trad IRA(s) are acquired. Any direction to publications, code, or web sites is greatly appreciated.

Thanks very much! - Phil

[John G]

This message board is probably the most definitive source for asking questions about IRAs and Roths over the entire web. Barry Picker is a USA authority on Roths and been posting here for years. I have been specializing in Roths since they 1998. There are many experienced tax preparers, accountants and tax lawyers who will post replies on this message board. Your best chance for getting information is to clarify your original post here. Your second best source is IRS Publication 590, which does not directly address your question, but covers conversion rules.

I think you are misunderstanding some element of the Roth rules or procedures. Neither Barry nor I could originally conceive of a reason why you would want to take the route you suggest and make what should be a one step process into a two step. Your certainly not going to make any custodian happy with the paperwork. At this point, I am begining to think this might have something to do with a divorce decree and the differences between "Roth" and "IRA". I have trouble understanding why you want to be mysterious about your question. This message board aims for clarity about IRA/Roths.

Technically the answer to your question is that you can convert an IRA to a Roth many times and every year that you meet the income and filing status requirements to qualify. But both Barry and I were reluctant to post this and mislead other readers into thinking your proposal was normal.

There is a practical communication issue you need to understand. As one of the moderators of this message board, I have a responsibility to about misleading the average readers. Folks waste enough time trying to understand the basics, they should not be left hanging on some issue. If you can't clarify the question, I will have to close down this thread because folks could be mislead into thinking this was common practice.

[Guest phactor]

Yes, I would be happy to narrow down two questions as clearly as I can. I respect this site, and both of you, I do not wish to cause any readers to be misled, and I apologize for not making things clear from the start.

1. I converted my Traditional IRA over to a Roth many years ago. I now have another Traditional IRA and want to convert that over too. Can I?

2. In five years, if/when I have another Traditional IRA, assuming tax and retirement laws don't change things, does present law currently suggest I might again be able to convert that Traditional IRA over?

[BPickerCPA]

As John stated, you can convert any IRA you have into a Roth, in whole or in part, in any year that you meet the income limitations. There is no limitation on how many conversions you can do, except for limitations on converting the same money if you were to recharacterize a conversion.

Understand that if you have retirement money that is not in an IRA, it would have to moved into an IRA first, before conversion.

[John G]

I hope you are comfortable with the answer from Barry and me. You have a lot of flexibility on how many dollars to convert, when you convert and how many times you convert. (Note, there are limits each year to how many times you can un-do or reclassify a conversion back to a regular IRA)

From my side, however, I sure wonder about where the first, second and someday potentially third IRAs are coming from. If these have been started by you as contributor IRAs, I don't see any advantage in not just contributing to a Roth in the first place.

If these IRAs are coming from some kind of corporate rollover of retirement assets, then it makes more sense. Every few years you get leave one employer keeping the retirement assets sheltered, moving them into an IRA your control, then converting that IRA to a Roth.

[Guest phactor]

Yes, good answers all around, thank you. I didn't see that 3rd paragraph in John's Jun 28 2004, 10:17 AM post when I first read it; sorry I missed it.

Anyway, when I first started this thread, I did not know what I've since learned in the past 36 hours from my 401(k) Plans thread "401k distributions during employment; who governs this directive?" but that information doesn't belong in this thread, thus the mystery... sorry again.

No divorce. Nope! We're just switching 401k sponsors and I'm trying everything I know to move the funds into a Traditional IRA, but I'm butting up against the dratted successor plan / distributable event rules. Double drat!

If you know of any magic to accomplish that, I'll bet I'm not alone in wanting to learn how...