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.
Thank you.
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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.
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