02/2010 – Roth IRA Conversions in 2010

By S.R. Snodgrass Tax Group

Roth IRA Conversions in 2010

Beginning in 2010, individuals at any income level may convert a “traditional” IRA (including SEP IRA or SIMPLE IRA) or a rollover distribution from a tax-qualified plan into a Roth IRA. The conversion of an IRA account into a Roth IRA account is a taxable event. The income subject to taxation on a Roth IRA conversion is reported as ordinary income. The amount of ordinary income which is taxed on a Roth IRA conversion is calculated considering the basis and fair market value of ALL IRA accounts (excluding Roth IRA’s) the individual has.

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