2010 traditional ira to roth ira rules

[duanecpa]

I have a client who has a rollover IRA which was a 401k from a perivious employer - can the rollover IRA be converted to a roth IRA in 2010 just like a traditional IRA?

Thank you.

[OtisMozzetti]

yes

Yes, the traditional IRA which came into being as a rollover can be converted into a Roth during 2010 without any income limits. The taxable income from the conversion (apparently they have no basis in the IRA) may be reported 50% during 2011 and 50% during 2012, or it could all be reported during 2010. The conversion could alternatively be carried out during any year after 2010; in that event the conversion income would be reported during the year of conversion.

I am still not sure how the conversion would interact with any possible deductible contributions during 2010 to a traditional IRA. You didn't ask that; however, it is still an open question.