IRA convert to Roth IRA

[KJ Judd]

Client has low income in 2006 and is asking if he should convert his traditional IRA to a Roth. I thought a conversion is taxable in the year it occurs. Unlike an IRA contribution where you have until April 15th to make a contribution for the previous year. I look in TTB & my Master Tax Guide & I don't see this spelled out. Can anyone confirm if he converts his IRA to a Roth in March 2007 it is a 2007 transaction?

[OldJack]

An IRA conversion to a Roth in the year 2007 would be reported on the 1040 tax return for 2007 and subject to 2007 income tax. The Income limitation would be from the 2007 1040 tax return and the IRA would issue a 1099R for the year 2007.

[Gene V]

Oldjack is correct, now if he had taken out the IRA in December of 2006, then he could roll the IRA into a Roth in 2007. (Within 60 days of his IRA distribution).

[KJ Judd]

That's what I thought. Thanks for the quick confirmation.