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Conversions of Traditional IRAs and Qualified Retirement Plans Into Roth IRAs Under TIPRA and the PPA  


Author:  Dennis R. Lassila.; Frederick J. Feucht.


Source: Volume 25, Number 02, Winter 2008 , pp.40-60(21)




Journal of Taxation of Investments

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Abstract: 

Beginning in 2010, as a result of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), most individuals who have traditional IRA accounts will be able to convert those accounts to Roth IRAs, no matter how much income they have. In addition, under the Pension Protection Act of 2006 (PPA), 2 participants in qualified retirement plans will be able to make direct rollovers into Roth IRAs after 2007 and, beginning in 2010, regardless of their income. These changes make available tremendous retirement income planning opportunities to many participants in traditional IRAs that were not available before because of the $100,000 modified AGI limitation and were not available to qualified plan participants because they could not make direct rollover to Roth IRAs under former law. In a large percentage of cases, the taxpayer will benefit quantitatively from converting to a Roth IRA. In addition, there are other benefits to doing conversions including that minimum required distributions need not be taken by participants in Roth IRAs.

Keywords: 

Affiliations:  1: Texas A&M University; 2: Prairie View A&M University.

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