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Strategies & Market Trends : Roth IRA ideas -- Ignore unavailable to you. Want to Upgrade?

To: Ken Ludwig who wrote (38)	1/31/1998 6:57:00 PM
From: sea_biscuit	Respond to of 388

The problem I am trying to solve is the possibility that one opens a Roth IRA now and then has more than $100k ($150k married)in ordinary (AGI) income. Well, I have asked this question in bazillion forums(fora?) and have finally come to the conclusion that nobody really knows the answer to this one! The most logical thing for the IRS to do in such a case would be to allow you to convert your Roth IRA to a regular IRA, without any penalties or taxes. But then, I don't think we are allowed to use the word "logical" and the acronym "IRS" in the same sentence! :-) My solution is this -- I won't put any money in any IRA right now. By early 1999, I will know my exact AGI for 1998. And then I will open a Roth IRA for 1998 (for which I have time until April 15, 1999) if I am eligible. If I am not eligible for the Roth IRA, then I will open a traditional IRA. I have given up trying to do anything better than that. Dipy.

To: Ken Ludwig who wrote (38)	1/31/1998 9:21:00 PM
From: Bill Shepherd	Read Replies (2) \| Respond to of 388

RE:$100k ($150k married)in ordinary (AGI) income I'm seeing some confusion on this thread related to the 100K and 150K limits. Here's what I understand: 1) To transfer funds from an existing "regular" IRA to a ROTH IRA, your AGI cannot exceed $100K in the year the transfer is made. This is without regard to single or married filing status. 2) To make contributions to a ROTH IRA, there are income limits. Single filers have AGI limits of $95K to make full contribution of $2,000, and make make partial contributions if AGI is between $95K and $110K. Married filers have a limit of $150K for full contributions and partial contributions between $150K and $160K. Also, any gains made as part of the conversion are not included in AGI. IMO, if you have doubts whether your AGI will be under $100K this year, and you want to convert, I would wait until your AGI number is more certain. You can, of course, open a ROTH IRA for 1997, and convert older IRA funds later in the year (if your AGI is less that limits in point 2, above.) My 2 cents. Bill

To: Ken Ludwig who wrote (38)	1/31/1998 11:08:00 PM
From: Mitch Aunger	Read Replies (2) \| Respond to of 388

Ken, I think part of your note was not correct. You said: <<My other concern is how AGI is calculated in this year if a lot of gains are made within the Roth to push total income over the limits. >> I do NOT believe any gains in ANY IRA are included in AGI. I've been making good money in my self directed IRA on stocks and I've never seen any place to claim those gains NOR has my brokerage sent me any 1099 -xxx statements indicating I needed to make such claims. That is one of the great things about self directed - assuming you are making money on your trades. I also believe (tho I can't pinpoint my source right now) that the funds being rolled over from a regular IRA to a ROTH, altho they are going to be taxed, are NOT included in AGI. Someone please correct me if I'm wrong. Thanks to all for the dialog! Mitch