0

Say a person has $50,000 in his/her traditional IRA account. Now due to Now he wants to transfer part of it say $10,000 into a roth-IRA account. Is such a partial roll over to roth-IRA possible? Also the person only has to pay taxes on the $10,000 he/she is transferring/rolling over to roth-IRA right?

Improve this question

1 Answer 1

Reset to default
1

Yes, you can convert as little as you want to a Roth IRA, all the way up to the entire account value. At most you would owe regular income tax on the full amount you convert; less if you made non-deductible contributions.

Also note that you don't need to call it a "backdoor" conversion, particularly if it's taxable. It's just a standard Roth conversion.

Improve this answer
4
  • thanks for the clarification Craig. Just to follow up on your comment on the backdoor-ira; Is backdoor roth-IRA the one where someone converts a 401K into a roth-IRA via a traditional IRA? Thank you.
    – adi
    Jun 7, 2021 at 23:53
  • @adi It's not an official term but a "backdoor Roth IRA contribution" is when you make a non-deductible traditional IRA contribution and convert to Roth soon afterward. Additionally you could call it a "backdoor Roth conversion" when the conversion is primarily non-taxable.
    – Craig W
    Jun 8, 2021 at 0:08
  • Craig, you mentioned conversion is primarily non-taxable.. What is the scenario wherein any conversion to roth-IRA can be non-taxable? As far as I know both conversion of 401K directly to roth-IRA and traditional to roth-IRA have tax consequences.
    – adi
    Jun 8, 2021 at 1:48
  • 1
    @adi When you make a non-deductible traditional IRA contribution, and then immediately convert, it will be 100% (or very nearly) non-taxable.
    – Craig W
    Jun 8, 2021 at 1:50

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .