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Learning, Sharing, and Teaching => Investor Alley => Topic started by: HangarBay44 on November 12, 2017, 06:57:56 AM

Title: [Solved] Small dividend leftover in tIRA after Roth conversion
Post by: HangarBay44 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: