Author Topic: [Solved] Small dividend leftover in tIRA after Roth conversion  (Read 1057 times)

HangarBay44

  • 5 O'Clock Shadow
  • *
  • Posts: 3
[Solved] Small dividend leftover in tIRA after Roth conversion
« on: November 12, 2017, 06:57:56 AM »
Solved - see below

Hello everyone -

I recently did a tIRA to Roth conversion for this year. Opened a new tIRA, put in $5500, waited for the funds to be available, and then converted it into my existing Roth IRA. This was all done through Vanguard, and I am over the income limits for a Roth IRA and tIRA deduction, if it matters.

The problem is, after the $5500 was moved from the tIRA into the Roth IRA, I received a dividend of $0.30 on the $5500 from when it was in the tIRA.

So now, account balances are:
tIRA: 0.30
RIRA: Original amount + 5500

Has anyone encountered this before? I am confused about how to treat this dividend. Can I treat it as taxable income
and move it into a taxable account? or can it remain in the traditional IRA and be used for a Roth conversion in 2018?

I suppose my main concern is how this may affect upcoming taxes and future conversions.

Edit: Dug a bit deeper after my initial search, and I found this:
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/
« Last Edit: November 12, 2017, 08:12:02 AM by HangarBay44 »