Relationship of child's Roth conversion to parent

[Guest Sonny]

My dependent converted a regular IRA to a Roth IRA, resulting in income in 1999 in excess of $2750. $2750 is the limit of taxable gross income that a dependent can have without becoming ineligible to be claimed as a dependent. My dependent had no other income whatever except the Roth amount. Can he or can he not be claimed as a Dependent on my return? All other IRS requirements for dependency are met.

[BPickerCPA]

There is an age basis that allows a dependent to have more than $2750 of income and still be an exemption. It's 19 for a non student and either 23 or 24 for a student (I forget).

Assuming you DON'T meet this benefit, you will lose the exemption based upon roth conversion income.

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Barry Picker, CPA/PFS, CFP

New York, NY