easy · Certified Financial Planner Risk Management
A client, David Ainsley, wants to convert 50,000 of his Traditional IRA to a Roth IRA. He has90,000 in pre-tax money and 10,000 in after-tax contributions across all his IRAs.
How much of the50,000 conversion will be taxable?
- $45,000
- 0, because the conversion can be specifically attributed to the10,000 after-tax basis first.
- $40,000
- $50,000, because all Roth conversions are fully taxable in the year of the transaction.
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