General Rules
A conversion always involves funds moving to this type of IRA, never in reverse.
What is a Roth IRA?
This person can help a client fill out any conversion tax forms, like the 8606 or 1040.
What is a CPA?
A 75-year-old has a Traditional IRA that she wants to convert to a Roth IRA. She must take this before she can convert.
What is her RMD?
You do cannot do this to pre and post-tax assets after you mix them.
What is separate them?
If a client has not made contributions to their Traditional IRA this year or last year, they can use the ________ command to convert the entire account into a Roth IRA.
What is MAKEROTH?
It is better to convert when you are in a lower ______.
What is lower tax-bracket or age range?
When a client has co-mingled funds, this formula is used by the IRS to determine how much is pre-tax and how much is after-tax. The amounts can no longer be separated.
What is pro-rata?
SEP, SIMPLE and Traditional IRAs are all eligible for conversion to a Roth. This type of account is not eligible for conversion.
What are inherited IRAs and non-retirement accounts?
This WEBID can be used to show a branch associate what the pro-rata formula looks like.
What is WEB046939?
Conversions must be completed by this day of the current year to qualify as a current year Roth conversion.
What is the last business day of the current year?
These are two benefits of converting to a Roth IRA.
What are planning for tax diversification, benefiting from a lower tax bracket, and not having to take RMDs after conversion to the Roth?
Financial advisor Brooke is calling because her client Rupert has converted $7,500 from his Traditional IRA to his Roth IRA. These two tax forms will be sent by Edward Jones. One of these marks the distribution, and one marks the conversion to the Roth.
What are the 1099-R and 5498.
Client Raymond is concerned that converting assets to his Roth IRA will increase his Adjusted Gross Income and may impact these benefits.
What is Social Security and Medicare?
According to WEB046939, this is "C" in the pro-rata formula.
What is the total amount distributed or converted in the calendar year?
This must be signed before a MAKEROTH conversion can be completed
What is the MAKEROTH Conversion form?
The Roth Fact Conversion Sheet is located on this WEBID.
What is WEB5143256?
According to WEB5143008, a client will determine the taxable amount of the conversion on this tax form.
What is the 8606?
According to WEB5143862, these types of conversions are allowed. Selling of the assets by the branch or home office is not necessary for this type of conversion.
What is in-kind conversion?
According to WEB046939, the pro-rata formula will give you this portion of the distribution. (hint: taxable or non-taxable)
What is non-taxable?
Client Katrina recently got a large raise at work and is therefore ineligible to contribute to her Roth IRA. Her financial advisor points out that she may be able to contribute to her Traditional IRA and then convert the funds to her Roth IRA. This strategy is called this.
What is the back-door Roth conversion?
According to WEB5146470, Roth Conversions are this type of transaction and cannot be taken back once done. This is why talking with a CPA is so important.
What is irrevocable?
According to WEB5143008, tax __________ is not automatically done with conversions. The branch will need to send a separate check to the IRS through Cash Service, and it will be reported as a distribution.
What is tax withholding?
This is not required to be taken at age 73 for a Roth IRA, which is one of the benefits of converting from a Traditional IRA to a Roth IRA.
What is RMD?
According to WEB046939, the pro-rata formula doesn't just calculate your pre-tax and after-tax amounts from one account. The assumption is that the _______ balances are used when calculating the taxable and nontaxable amounts. This means if you have existing pre-tax in ANY Traditional, SIMPLE, or SEP, you will be comingling your funds.
According to WEB5143862, who will place the appropriate sells for conversions in Advisory/Guided accounts for a cash movement of funds?
What is Home Office?