|
Posted by bono9763@yahoo.com on September 8, 2007, 12:26 am
Please log in for more thread options
> I know I need to study IRS Pub 590, but I am hoping some
> kind soul will offer some educated insights ....
>
> As I recall, it is best to avoid comingling pre- and
> post-tax contributions in IRAs. I think it simplifies
> things when determining the tax on distributions. Is that
> right?
>
> Or does the IRS require that you prorate the taxability of
> distributions across all IRAs, independent of the ratio of
> pre-tax and post-tax contributions in each IRA that funds
> were actually distributed from?
>
> Assuming that I am correct about perferring to keep pre- and
> post-tax contributions in separate IRAs, is there anything I
> can to correct the situation if I inadvertently comingled
> them?
>
> I am talking about effecting a correction, if possible,
> within a few days after I pushed the button to consolidate
> the separate IRAs.
>
> (I forgot why I was keeping them separate in the first
> place, and I decided to consolidate two IRAs that I have at
> one brokerage firm.)
>
> If I simply create a new IRA and fund it with the amount of
> the post-tax IRA before consolidation, would that be
> sufficient.
>
> It is not clear to me how the IRS, decades later, know how
> much of an IRA was funded with pre-tax contributions and how
> much with post-tax contributions. But if it matters, the
> pre-tax IRA, which now includes some post-tax contribution
> and its earnings, was designated as a Rollover IRA when the
> account was opened.
>
> (I'm not sure that designation has stuck with the account
> since then. I need to check records.)
There is no need to keep separate accounts, as the IRS makes
you add up the total of all your IRAs and calculate a
percentage non-taxable based on your non-deductible
contributions over the years. The IRS bases the calculations
on the Form 8606 that you filed each year you had a
non-deductible contribution to an IRA.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap