Roth IRA Tax Help

[Guest Tom McGurgan]

I'm thinking about converting a traditional IRA and Rollover IRA into one Roth IRA(combine the funds). For tax purposes, I'm thinking that the taxable income would include all of market value of the rollover IRA and the portion of gain on the traditional IRA(would not include my $2000 dollar contributions since this was after tax dollars that I already paid taxes on). Does anyone have any info. or know where I can get an answer. I tried the IRS but all that was offered was the automated telephone messages..

[BPickerCPA]

Assuming you are converting 100% of your IRA dollars, you will pay tax on the total value converted less any basis arising from non deductible contributions to the traditional IRA.

If you are converting LESS THAN 100% of your IRA dollars, then the basis from non deductible contributions has to be allocated between the amount converted and the amount not converted. Form 8606 would handle the workings of the calculation. You can get Roth info at http://www.rothira.com.

[Edited by BPickerCPA on 09-15-2000 at 09:26 AM]