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Use your leeway on partial Roth conversions

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in Leaders & Managers,Management Training

Q. In a recent article, Roth conversions: a partial maneuver, you said you could convert part of an IRA to a Roth. Can you undo a partial conversion? K.M., Champaign, Ill.

A. Yes. You have greater flexibility if you later decide to reconvert to a Roth. Normally, if you undo a Roth IRA conversion, you can’t reconvert until the next tax year. However, this delay applies only to the amount that was converted. Therefore, you can convert other funds in your traditional IRA without violating this rule.

Tip: Starting in 2010, you can convert to a Roth regardless of your AGI. For 2009, a $100,000 dollar cap still applies.

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