ROTH IRA Answers

Are "earnings" from a 401(k) rollover to a Roth IRA considered in "substantial gainful activity" S.S.A. calcs.?

Roth IRA Answer Gal — Sun, 25 Jul 2010 10:54:52 +0000

. . . since the Internal Revenue Service taxes them as "earned income" in the year that you roll them over to the IRA, since they weren’t taxed during the tax years when they were being earned and deposited into the 401 (k)?

Or, is the IRS definition of "earned income" different from the Social Security Administration definition of "gainful activity" "earned income", in this case, since you weren’t doing any work to earn the now-taxed income in the specific year that the rollover to the IRA takes place?

I want to convert IRA's set up with after tax contributions to a Roth IRA in 2010. Are there Tax implications?

Roth IRA Answer Gal — Sat, 24 Jul 2010 19:13:31 +0000

I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?

I want to convert IRA's set up with after tax contributions to a Roth IRA in 2010. Are there Tax implications?

Roth IRA Answer Gal — Fri, 23 Jul 2010 15:57:03 +0000

I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?

Why are traditional IRAs taxed at ordinary rates upon withdrawal?

Roth IRA Answer Gal — Wed, 21 Jul 2010 00:02:10 +0000

I contribute to a Roth IRA, but I foresee my income levels in the future causing me to switch to a traditional at some point.

Is it true that distributions from a traditional IRA are taxed at ordinary rates even if the accumulation is from capital gains? If so, why? And does that mean that I should invest in individual stocks and mutual funds in my regular brokerage account and restrict my trad. IRA investments to ordinary income producing investments like bonds? I cannot stand to think of converting capital gains income to ordinary income even if the initial investment is tax deductible.

Also, are those rules the same for 401(k) distributions?

Thanks for any clarification or advice!
I am aware that is the law which is written by congress… that’s why I’m asking is it better to use all IRA funds for ordinary income producing investments and keep capital gain producing investments in a taxable account since there is already a deferral and (probably) preferential rates?
Also, I do not expect to have income that "per year varies considerably". I expect to have steadily increasing income until I retire.

I want to convert IRA's set up with after tax contributions to a Roth IRA in 2010. Are there Tax implications?

Roth IRA Answer Gal — Mon, 19 Jul 2010 21:37:11 +0000

I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?

If I convert my rollover & nondeductable IRAs to Roth, can I then comingle those with my existing Roth IRAs?

Roth IRA Answer Gal — Sat, 17 Jul 2010 21:20:27 +0000

In my retirement account I have a Rollover IRA from a former employer, a Roth IRA, and also a traditional (nondeducted) IRA, all are in separate accounts — I understand that tax rules don’t allow comingling of funds with different rules (like Roth vs. Traditional.) If I convert my Rollover and traditional IRAs to Roth, then all the different accounts would be under the same rules. Will I then be able to combine/comingle those acconts, so all the funds are in one big account?

I want to convert IRA's set up with after tax contributions to a Roth IRA in 2010. Are there Tax implications?

Roth IRA Answer Gal — Mon, 12 Jul 2010 05:06:23 +0000

I have several IRA’s that are all funded with after tax contributions and have not been deducted from any tax return. Can I convert then in 2010 to a Roth without any penalty or tax payments?