The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: geekette on October 20, 2013, 01:22:17 PM

Title: Do I need to keep conversion Roth and contributory Roth accounts separate?
Post by: geekette on October 20, 2013, 01:22:17 PM

I'm trying to make things easier on myself, but I don't know if I should mingle conversion Roth accounts with contributory Roth accounts.  It's been at least a decade since the conversion, if it matters.

My husband has stuff in 4 funds, and we want to just lump it into an index fund.

Title: Re: Do I need to keep conversion Roth and contributory Roth accounts separate?
Post by: fiveoclockshadow on October 21, 2013, 08:12:10 AM

No you don't.  Tax laws treat all of your Roth accounts as a single account.  And they treat all of your traditional accounts as a separate account.

For Roth withdrawals in the future you will treat all of your contributions (both annual contributions and roll over conversions) to all Roth accounts together and these will come out first as far as tax laws are concerned regardless of which account you actually contributed to and which you withdraw from.

Basically all your past tax year Form 8606 entries are what keep track of how much you contributed or converted.  Which accounts those were to and which you withdraw from neither the IRS nor your IRA institution keeps track of.