medium · Certified Financial Planner Investment Planning
A 42-year-old client, Novak, has $45,000 in a traditional IRA consisting of $36,000 in pre-tax contributions and $9,000 in after-tax contributions. Novak also has a rollover IRA with $55,000 of entirely pre-tax funds.
If Novak converts $10,000 from the first IRA to a Roth IRA, what amount is subject to ordinary income tax?
- $8,000
- $10,000
- $1,000
- $9,100
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