Q: I'm 60 years old and have a traditional IRA with $250,000 in it. I also have a Roth IRA in its third year. Can I roll over the traditional IRA to a Roth and use $150,000 of NOLs to offset any tax that must be paid? B.W.
A: That depends. You can "convert" (or roll over) assets from a traditional IRA to a Roth IRA in any year that your modified adjusted gross income is $100,000 or less. But you must pay tax on the taxable balance that is rolled over. Subsequent withdrawals from your Roth IRA, including earnings, will be tax-free after five years. Alternatively, you can convert smaller amounts each year over several years, thereby reducing and spreading out the tax hit. Tip: If you have current net operating losses (NOLs), this may be the year to convert to a Roth (assuming you qualify).