Roth Conversion

I am single and I am not eligible to contribute to a Roth IRA. I do contribute to a 401K plan. On 12/20/2010, I created a traditional IRA with 5K (post-tax) with the intention of rolling it into a Roth IRA. I have the following questions:

. Do I have to roll it into a Roth IRA before Dec 31st 2010 to avail of the "2010 Roth conversion" provision?

. In subsequent years, can I continue to contribute 5K/yr to my traditional IRA and continue to roll it into the Roth the following day (or is the conversion allowed in 2010 only)

I am assuming there are no tax implications since I am rolling post- tax money almost immediately into the Roth account. Thanks.

Reply to
Mahesh
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Yes.

Yes, for subsequent years you can do the same thing -- only the special two-year taxation rule is limited to 2010 conversions.

You will have to fill out a Form 8606. If there were any earnings on the IRA money in the short time before conversion, that will be taxable conversion income.

-Mark Bole

Reply to
Mark Bole

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