Converting to a ROTH in 2011?

[Lori H]

If a traditional IRA converts to a ROTH in 2011, can they spread the taxes over 2 years or was that just for conversions in 2010?

[ETA Consulting LLC]

No. That was only for 2010.

Good Luck!

[John Feldt ERPA CPC QPA]

Perhaps they can convert half of their eligible account in 2011 and convert the rest in 2012. Market gains would be the only issue, but it would spread the taxation.

[Lori H]

Perhaps they can convert half of their eligible account in 2011 and convert the rest in 2012. Market gains would be the only issue, but it would spread the taxation.

Thanks. I will suggest that to her.

[John G]

Only issue?

I can think of two others: (1) the person may not qualify for a Roth conversion in subsequent years, and (2) Congress could change the rules and make subsequent conversions problematic.

The average Joe problably does not have a problem with the first point. Changes in the rules are common but the probability of a conversion rule change is pretty low.

Reminder: often a partial conversion works out well. If you have a substantial IRA, converting something like 1/2 gives you a lot more flexibility and perhaps more that 1/2 of the benefits of a full conversion.

[John Feldt ERPA CPC QPA]

How does one eligible for an in-plan Roth rollover in a qualifed plan become ineligible for an in-plan Roth rollover in a later year?

Yes there are other risks other than market gain risk, of course market loss would be a benefit (from a taxation standpoint). Yes, other risks exist: rules could change (why ever do Roth then?), the particpant could die, unrecoverable calamity could strike the asset holder, the government could be overthrown. The participant will have to base their decision on the best information available.

[Guest Sieve]

Does anyone know if Congress is making noises (other than normal Congressional grunts) about possibly renewing the 2-year tax treatment of Roth conversions for 2011?