Conversion and contribution in same year - allowed?

[Michael Devault]

I would bet that the Quick & Reilly document has since been revised. At one time, it was thought that you couldn't combine contributions to a Roth IRA with Roth conversions, due to withdrawal restrictions. However, the Service has since issued guidance that addresses these issues, making it allowable to combine them.

Hope this helps.

[Guest Daniel Shedd]

I have a document from a coworker's broker Quick & Reilly which is titled "IRA, Agreement & Information Guide" dated 12/97.

This document states "if a Roth IRA is designated as a Roth Conversion IRA, no other contributions other than IRA Conversion Contributions made during the same tax year will be accepted."

When I called my broker Vanguard they said no problem. When I play around with Turbotax and enter conversions and regular Roth contributions in the same year is doesn't flag a problem.

Is there a prohibition in the tax code preventing same year conversion and regular Roth contributions? Or is this just a broker to broker policy difference?

TIA

Dan

[John G]

You may convert an IRA to a Roth in the same year you make a standard contribution to a Roth. They may involve the same account of different accounts.

If your custodian says otherwise, they are not telling you IRS requirement. They may be mistaken or ill informed... either way it suggests you find a more knowledgeable custodian.