RE: [taxchat] Roll over question

Mel,

 

Doing a conversion now, before 2010, you still have the AGI limitations to deal with. Also,if the Traditional IRA's have basis from non-deductible contributions, then the taxable portion would be only the earnings, correct? 

 

Donna

 

Donna J. Perrone, EA

East Haven, CT

203-469-4939

203-468-2038 fax

 

 

IRS Circular 230 Disclosure: Unless expressly stated otherwise, any tax advice contained herein, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.

 

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From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Mel Wolfson
Sent: Saturday, December 06, 2008 11:08 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Roll over question

Converting to a Roth in 2008 makes sense in that rates are lower now than they are likely to be in the future. Also, if the market recovers, the recouped loss will be never be taxed. In order to recognize the conversion for 2008, you would have to do it before the end of the year. It is only recharacterizations and new contributions that can be made before the due date of the return.

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From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Robert Lukey
Sent: Saturday, December 06, 2008 5:58 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Roll over question

Here's the whole thing:

 

Quick question for you regarding Traditional vs. Roth IRA's....  My wife is 52 and I am 53.  We had before the stock market crash approximately $125,000 of mutual funds in traditional IRA's which obviously are worth significantly less now.  We expect future income tax rates to increase dramatically between now and the time we retire.  Our business income is way down this year due to the rotten economy.  Does it make any sense for us to convert our traditional IRA's to Roth IRA's given this scenario?  Is it advantageous to pay income tax now for the benefit of not paying income taxes following our retirement?  If this makes any kind of sense, does the roll over have to be done by 12/31/08 for the 2008 income tax return?

On Sat, Dec 6, 2008 at 12:01 PM, Arnold M. Socol <waymeans@verizon.net> wrote:

Bob, give us more info when you have it.

 

 

----- Original Message -----

From: Robert Lukey

To: taxchat@yahoogroups.com

Sent: 12/06/2008 10:22 AM

Subject: [taxchat] Roll over question

My client has an IRA that has tanked badly. They want to know if they have to roll it over before 12/31/08 in order for it to be an 08 rollover. I've got limited knowledge here. Can they wait and do it before they file? I believe they have to roll over before 12/31/08 but can change their mind and revert back before filing.

--
Robert Lukey EA CPA

Arnie Socol
President
Ways & Means, Inc.
845-562-6070

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IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.

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