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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
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To: Colin Cody who wrote (688)2/28/1998 10:42:00 PM
From: Investor2  Read Replies (1) of 5810
 
RE: "Why would you do THAT, rather than say, make a 1997 DEDUCTIBLE IRA now and roll that over to a Roth. Why did you specify a NON-DEDUCTIBLE contribution for 1997?"

The recommendation was made by someone calling himself an "accountant" who I know nothing about. I didn't ask his rationale, and I was wondering if you could offer any insight on the strategy.

The deductible contribution would be taxed as regular income if I immediately switch it to a Roth IRA. The extra income would be spread out over the next four years, the way I understand it. By making a non-deductible contribution for 1997, I will be taxed on the entire amount this year. Is that correct?

Best wishes,

I2
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