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?? Question of the Month: Will The Pro-Rata Rule Apply In My Conversion? Q: I have been doing backdoor Roth contributions for several years, but have not done my 2012 or 2013 contributions/conversions yet. I will most likely roll over a 401(k) into an IRA in 2013. If I convert a traditional IRA to a Roth now and then do the 401(k) rollover later in the year, will I need to pay pro-rata taxes on the converted amount? Essentially, are taxes calculated using my pre-tax IRA holdings at the time of the conversion (none) or at the end of the year? A: The pro-rata rule will apply. It will take into account any funds rolled into the IRA during the year and you will pay pro-rata taxes on the converted amount. CLICK HERE to view other questions and answers from The Slott Report Mailbag. 8,000 BABY BOOMERS RETIRE EACH DAY A SPECIAL SAVINGS PLAN + AN IN-DEPTH MANUAL + 2 DAYS WITH IRA EXPERTS Plan's Big Mistake Leads to Big Tax Problems for Participant
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Inside Ed Slott's IRA Advisor Newsletter![]() Plan's Big Mistake Leads to Big Tax Problems for Participant
Correcting Excess IRA Contributions
Guest IRA Expert
BIRE Financial Services
Profit From The Roth "Rule of 43" Not a newsletter subscriber? Preview past issues before subscribing. |
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