Converting to Roth from IRA with, in effect, no income
Howard Kaikow
Would it then be possible to convert $XXXX from an IRA to a Roth if
$XXXX were no more than the sum of standard deductions, elderly
exemptions, etc.?
What would $XXXX be for 2009?
For 2010?
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Bill Brown
> Assume that one has NO income.
>
> Would it then be possible to convert $XXXX from an IRA to a Roth if
> $XXXX were no more than the sum of standard deductions, elderly
> exemptions, etc.?
>
Yes.
> What would $XXXX be for 2009?
> For 2010?
If "one" is a single individual over age 65, then $XXXX = $10,750 in
2009 and about the same (maybe exactly the same) in 2010.
Hank Youngerman
> On Dec 2, 5:08�am, Howard Kaikow <kai...@standards.com> wrote:
>
> > Assume that one has NO income.
>
> > Would it then be possible to convert $XXXX from an IRA to a Roth if
> > $XXXX were no more than the sum of standard deductions, elderly
> > exemptions, etc.?
>
> Yes.
>
> > What would $XXXX be for 2009?
> > For 2010?
>
> If "one" is a single individual over age 65, then $XXXX = $10,750 in
> 2009 and about the same (maybe exactly the same) in 2010.
A few years ago, my parents had enough medical expenses to take their
income under the taxable threshold. I told them to do their taxes
right before year-end, and then do a Roth conversion for the amount
needed to bring them up to the threshold.
Bill Brown
> On Dec 2, 7:08锟絘m, Bill Brown <brow...@longwood.edu> wrote:
>
> > On Dec 2, 5:08锟絘m, Howard Kaikow <kai...@standards.com> wrote:
>
> > > Assume that one has NO income.
>
> > > Would it then be possible to convert $XXXX from an IRA to a Roth if
> > > $XXXX were no more than the sum of standard deductions, elderly
> > > exemptions, etc.?
>
> > Yes.
>
> > > What would $XXXX be for 2009?
> > > For 2010?
>
> > If "one" is a single individual over age 65, then $XXXX = $10,750 in
> > 2009 and about the same (maybe exactly the same) in 2010.
>
> A few years ago, my parents had enough medical expenses to take their
> right before year-end, and then do a Roth conversion for the amount
> needed to bring them up to the threshold.
>
greater than his/her/their standard deduction then the amount that
could be converted "tax free" would be larger than the number I showed
in my first post.
HLunsford
>>
> Hank makes a good point. If a taxpayer's itemized deductions are
> greater than his/her/their standard deduction then the amount that
> could be converted "tax free" would be larger than the number I showed
> in my first post.
>
conversion to Roth since his taxable income was going to be less than
zero. Plus the fact that his wife isn't long for this world, and he'll
be back to single without her exemption and standard deductions after that.
After computing the maximum amount he could convert with no increase in
either federal or state tax, he mentions his 8 new insulated windows
which qualify for the credit. It was back to the drawing board with an
increase in the amount to convert.
PPPPP results. And tax savings.
ChEAr$,
Harlan Lunsford, EA n LA
Howard Kaikow
> On Dec 2, 5:08 am, Howard Kaikow<kai...@standards.com> wrote:
>> Assume that one has NO income.
>>
>> Would it then be possible to convert $XXXX from an IRA to a Roth if
>> $XXXX were no more than the sum of standard deductions, elderly
>> exemptions, etc.?
>>
>
> Yes.
>
>> What would $XXXX be for 2009?
>> For 2010?
>
> If "one" is a single individual over age 65, then $XXXX = $10,750 in
> 2009 and about the same (maybe exactly the same) in 2010.
Thanx.
I do not understand where the 10750 comes from.
Using the 1040 for 2008, if I enter an adjusted gross income of 10750 on
line 38, I seem to find that:
Box 39a will have a 1.
I have to check 39c, as I did pay a property tax.
Line 40 seems to indicate that I have to use the Standard Deduction
worksheet.
On that worksheet, I enter:
5450 for line 1
NO for line 2
5450 for line 4
1350 for line 5
3127,60 for line 7
500 for line 8 and line 9
7300 for line 10
7300 for line 40 on form 1040
3450 for line 41 on form 1040
3500 for line 42 on form 1040
0 for line 43 on form 1040
Does not that indicate that I could have entered 10800 on line
38 of form 140?
Or, are the numbers changing for 2009?
Howard Kaikow
I found the answer.
I downloaded the 2009 instructions for 1040.
The limit is $10749.
Howard Kaikow
My preliminary calculations indicate that by using Schedule L, I could
actually convert $16871.12 from my IRA too a Roth and not incur any taxes.
Is the following correct?
Total income would be $13877.60 (16871.12 conversion to Roth, -3000
capital gains loss, and 6.48 of interest income).
The AGI would also be $13877.60.
Using Schedule L, I can deduct $10227.60 (5700 + 1400 + 3127.60 for
property taxes.
This results in a taxable income of $3650, which is eliminated by the
personal exemption.
Don Priebe
> property taxes.
Nope. Limit on property tax adder to standard deduction is $500 for single.
--
Don EA in Upstate NY
Howard Kaikow
>> Using Schedule L, I can deduct $10227.60 (5700 + 1400 + 3127.60 for
>> property taxes.
>
> Nope. Limit on property tax adder to standard deduction is $500 for single.
Thanx.
I noticed that a few minutes ago, and just posted a correction.
Howard Kaikow
My preliminary calculations indicate that by using Schedule L, I could
actually convert $14243.52 from my IRA to a Roth and not incur any taxes.
Is the following correct?
Total income would be $11250 (14243.52 conversion to Roth, -3000 capital
gains loss, and 6.48 of interest income).
The AGI would also be $11250.
Using Schedule L, I can deduct $7600 (5700 + 1400 + 500 for property taxes.
Mark Bole
> CORRECTION:
>
> My preliminary calculations indicate that by using Schedule L, I could
> actually convert $14243.52 from my IRA to a Roth and not incur any taxes.
>
> Is the following correct?
>
> Total income would be $11250 (14243.52 conversion to Roth, -3000 capital
> gains loss, and 6.48 of interest income).
>
> The AGI would also be $11250.
>
> Using Schedule L, I can deduct $7600 (5700 + 1400 + 500 for property taxes.
>
> This results in a taxable income of $3650, which is eliminated by the
> personal exemption.
>
You might as well throw another $4 in there, since $4 of taxable income
still results in no tax.
Or, throw in $14 of taxable income and only pay $1 of tax.
-Mark Bole
Howard Kaikow
> Howard Kaikow wrote:
>> CORRECTION:
>>
>> My preliminary calculations indicate that by using Schedule L, I could
>> actually convert $14243.52 from my IRA to a Roth and not incur any taxes.
>>
>> Is the following correct?
>>
>> Total income would be $11250 (14243.52 conversion to Roth, -3000
>> capital gains loss, and 6.48 of interest income).
>>
>> The AGI would also be $11250.
>>
>> Using Schedule L, I can deduct $7600 (5700 + 1400 + 500 for property
>> taxes.
>>
>> This results in a taxable income of $3650, which is eliminated by the
>> personal exemption.
>>
>
> You might as well throw another $4 in there, since $4 of taxable income
> still results in no tax.
>
> Or, throw in $14 of taxable income and only pay $1 of tax.
>
> -Mark Bole
>
I can add $4.99.