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To: MCsweet who wrote (51262)	4/9/2013 2:32:58 PM
From: deeno	1 Recommendation Read Replies (1) \| Respond to of 78670

"I did a major Roth IRA conversion awhile ago that cleared out my traditional IRAs and have been doing the 5k conversion arb every year for the past couple of years. I am just now finishing paying off the huge tax hit of the traditional IRA conversion, but the Roth account has really taken off so it looks like it is worth it." did the same. Actually did a number of recharacterizations in 2011 and reconverted in 2012. Kinda wish I hadnt bothered. "However, when Obama talks about limiting IRAs it makes me think I maybe shouldn't be so aggressive in loading up the Roth IRA going forward." Came to the same conclusion. Flat tax, means testing, decreasing bracket, ETC. to many things could happen to put all your eggs into the ROTH basket. Adding to deferred plans again.

To: MCsweet who wrote (51262)	4/9/2013 3:17:30 PM
From: Grommit	Respond to of 78670

Well, thank you for posting. I quickly found this (below) after looking at form 8806 instructions. The etrade guy who I talked to was leading me down the wrong path. I almost got nailed. So I will just do an IRA withdrawal of an excess contribution. (I already re characterized my 2012 roth contribution into 2013, and now I will just withdraw the 2013 contribution (and the gains come out too). >In many cases, a individual will own both deductible and nondeductible IRAs. In this scenario, the tax laws mandate that your basis (in the nondeductible funds) be spread out over all traditional IRA funds (even if they are held in separate accounts at different financial institutions). ...People can "isolate" their nondeductible IRA funds using the following strategy. Taxpayers are allowed to rollover funds from their traditional IRAs to a qualified plan such as a 401(k) or 403(b) plan. Furthermore, taxpayers can choose to rollover only their deductible traditional IRAs. By performing such a rollover, a taxpayer can move all their deductible IRAs to a 401(k) or similar plan, leaving behind only nondeductible funds in their IRA. Then, taxpayers can rollover their nondeductible funds to a Roth IRA. This preserves the basis in their nondeductible IRAs, resulting in lower income recognized on the Roth conversion. taxes.about.com