State tax on Roth conversion - NY or NJ?

I am finally close to completing my traditional to Roth IRA conversion. It
is nigh unbelievable how many mistakes and misdirections Citi Smith Barney
personnel have laid in my way.
Since I originally started the account when I lived on Long Island, the
advising to this account is at an office in Garden City. But 10 years ago
I moved to NJ. I am planning to pay taxes due to the Feds and to NJ. I
hope that the location of the advisor in NY won't lead me into trouble with
Andy Cuomo, the NY AG, if I don't pay NY taxes on this conversion.
Does anyone see any problems with this?
Reply to
I don't. While I'm not an expert on NY tax law, a distribution of deferred compensation, such as a Traditional IRA, is generally considered source income of the state where you are a resident at the time of distribution, and therefore only taxable by that state.
Did New Jersey have different rules in past years that might affect the basis in your Trad. IRA at the state level, for example different maximum deductible amounts? If so, New Jersey might want you to re-state your basis as if you had been a resident all along, but again I'm not an expert in NJ tax law either.
-Mark Bole
Reply to
Mark Bole
A long time ago I found comments like that "nigh unbelievable." Now I find them all too easy to believe. :(
Reply to
Bill Brown
Mark Bole wrote in news:MYYOk.4903$
Thanks, Mark!
Reply to
Mark and Dick are right on this. There is a federal statute (4 USC Sec. 114) that prohibits states from taxing certain retirement income of nonresidents on a source basis. Income from tax-qualified retirement plans such as traditional IRAs, including lump-sum distributions, can be taxed only by the taxpayer's state of residence at the time of the distribution.
Katie in San diego
Reply to
Katie wrote in news:
Thanks, Katie, and Dick, Bill, and Mark as well! Now I have to wait until Citi Smith Barney effect my instructions and then sit down with my TaxAct to estimate the taxes due.
Reply to

Site Timeline Threads

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.