Advanced Underwriting Consultants

Roth Conversion – Timing of Income Tax Question

We received a question about a taxpayer being able to defer income tax on an IRA to Roth conversion. That provision is effective for conversions that occur in 2010.

Owners of traditional IRAs will be able to defer income from conversions to Roth IRAs occurring in 2010 in equal parts to 2011 and 2012.

However, if a conversion is done this year, all the taxable income associated with the conversion will be recognized in 2009.