Re: Roth conversion 4 yr rule: tax or income?

From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Roth conversion 4 yr rule: tax or income?
Date: Mon, 26 Oct 1998 07:45:36 -0500

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>If I convert today, do I take the conversion amount, divide by four, and add it
>to my income over the next four years, or do I calculate my additional tax
>liability, and divide that over four years (adding it to my tax each year)?

In 1998 you have two choices:
(a) report the entire taxable amount of the conversion as income for
    the 1998 tax year, or
(b) report 1/4 of the taxable amount as income in tax years 1998, 1999,
    2000, and 2001.

For 1999 and beyond, you can only do (a).

Rich Carreiro
rlcarr@animato.pn.com
P5-100/RedHat Linux 4.1

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