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Submitted By: someone
Answered: January 20, 2020 9:26 pm
Answered: January 20, 2020 9:26 pm
If I convert my traditional IRA to a Roth IRA, does this create earned income?
No. The conversion triggers taxable income (the full amount of what’s in the traditional IRA if no nondeductible contributions were ever made). But the mere fact that the original contributions were based on earned income does not make the conversion income into earned income.
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Tax Glossary
Exemption
A fixed deduction allowed to every taxpayer, except those who may be claimed as a dependent by another person. Extra exemption deductions are allowed for a spouse on a joint return and for each qualifying dependent. A deduction of $3,400 is allowed for each exemption claimed on 2007 returns, but the deduction is phased out for certain high income individuals.
