Pension>Trad IRA>Roth

[Beth]

It appears to me that someone can in 2010, rollover a defined benefit pension from a former employer, to a trad IRA, and then roll the trad IRA to a Roth and take advantage of splitting tax payments in 2011 and 2012. Do you agree with my reading on this?

It also appears it can roll straight to a Roth, but then the tax due mentioned above would all need to be paid in 2010.

Lastly, does the rollover to the Trad IRA have to be in place for any defined time before rolling to the Roth?

A second opinion would be appreciated.

[Roland Slugg]

Both options are okay

Yes, the "conduit" IRA can be used, then the funds "converted" into a Roth IRA, but the T/P can also make a direct "rollover" of a distribution from an employer's plan directly into a Roth IRA. In either type of case ... conversion or rollover ... the tax can be deferred to 2011/2012 (IRS Pub 590, pp. 62~63)

The 1-year rule does not apply in these situations (also Pub 590).