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Discussion Forum Index --> Tax Questions --> Non-deductible IRA
TaxPerson (talk|edits) said:
| 8 December 2006
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| I understand that non-duductible contributions create basis in the account. However if the taxpayer also has a deductible IRA, when it comes to distribution, the amounts are aggregated and then a portion of the distribution is tax free while the rest is taxable, which is a big hassle. Question is: does separating those two different contributions in separate accounts solve the problem? I recall reading somewhere that regardless how many accounts you have, you treat them as one account when it comes to taking distribution. Could anyone clarify? Thank you for your advice.
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Death&Taxes (talk|edits) said:
| 8 December 2006
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| Your memory is not faulty: Sec. 408(d)(2) "All individual retirement plans shall be treated as one contract" and "all distributions during any taxable year shall be treated as 1 distribution,"
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AJS (talk|edits) said:
| 11 December 2006
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| What's the use of putting in non dedutible IRS why not move it to Roth?
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TaxPerson (talk|edits) said:
| 11 December 2006
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| AJS, this client's AGI is too high to contribute to Roth.
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