Solved - see belowHello 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/