I just converted my IRA and wonder how you tell the IRS when you are paying taxes on it. I know you have a choice of all in 2010 or splitting evenly between
The default is to recognize the income equally in 2011 and 2012, although you can elect to recognize it all in 2010.
The exact method, forms or schedules to use have not yet been announced. When income was recognized over 4 years in 1998, form 8606 was modified to allow four-year reporting of income.
It is possible that this form will be modified for 2010, or perhaps a whole new form will be created for the purpose.
When you file your 2010 return. As Art said, we won't know the exact method until the 2010 forms are out this fall. The decision is irrevocable.
Phil Marti VITA/TCE Volunteer
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