tax liability when owning 2 traditional IRA converting one
Hello,
My client has 2 traditional IRAs and they want to convert the one with lower balance to their Roth IRA.
what is their tax liability?
do they have to take into consideration both traditional IrAs for the sake of finding out what their tax liability is?
Permalink Submitted by Alan Spross on Wed, 2010-04-14 19:04
They have to consider both IRA accounts and the total basis from Form 8606 if they have a basis. It does not matter which account funds the conversion since the taxable amount will be the same either way. The 8606 basis (if any) is applied as a % of the adjusted year end values of both accounts.