$5,000 Rollover from a Traditional IRA to a Roth IRA put me over the $100,000 MAGI Limitation.

[Guest norman]

I took a $5,000 rollover from a traditional IRA to my Roth IRA. Prior to adding the $5,000 IRA distribution our MAGI was $99,000 and now it becomes $104,000. Since the $104,00 exceeds the $100,000 limitation do I now have to reconvert the $5,000 to my traditional IRA?

[Lori Friedman]

The taxable amount involved in a converting a traditional IRA to a Roth IRA is disregarded for determining MAGI. In other words, a taxable conversion doesn't defeat itself by pushing the taxpayer's MAGI over the prescribed limit. You might want to take a look at Reg. Sec. 1.408A-4, Q&A 9.

Norman, I just gave you the brief and simple answer. I hope I've answered your question, but I know that I haven't given you any tax advice. The calculations for MAGI can get very complicated, depending on the specific character of a taxpayer's other income, gains, and losses. Please consult with a tax advisor for more information.

[John G]

Terminology check! You don't rollover from any kind of IRA to a Roth, you do a "conversion". The amount converted does not factor into MAGI. Please read IRS Publication 590 carefully. If you have any doubts about what you are doing, check with your accountant or tax advisor.

I assume that you are talking about 2004 transactions. You can not be absolutely certain about your MAGI until you basically do your tax return and make sure that all of those 1099s fragments are known.