Conversion of Traditional IRA to Roth IRA – How to Deal with the Income Tax Consequences

For those taxpayers with a traditional IRA, for the balance of 2010, the government will allow you to convert an unlimited amount of your conventional IRA to a Roth IRA. A Roth IRA allows for withdrawals on an income tax-free basis. Upon conversion, the taxpayer must recognize the income in the year of conversion (or elect to spread the income over 2010 and 2011). The taxpayer must also wait to receive distributions from the Roth IRA for a period of 5 years. Otherwise, […]

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