Advanced Underwriting Consultants

Question of the Day – March 12

Ask the Experts!

Here’s the question of the day.

Question: My client started a Roth contribution in December of 2011 and completed it in January.  In which year should the conversion be reported on his tax return?

Answer: The Roth conversion is a generally a taxable event in the year the old carrier reports the taxable distribution to the IRS on Form 1099.

In this case, the tax reporting from the old custodian probably would report a taxable distribution in 2011.  The taxpayer, if doing a manual rollover, would have 60 days to complete the conversion with a re-deposit.  Even though the conversion would have been completed in 2012, the taxable event is for calendar year 2011.

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