Q.: Dan, I’m 72 and have a question about taxes and a Roth conversion. Assume I opened a conversion Roth IRA six years ago and converted a $1,000 from a regular IRA into that Roth and counted the $1,000 as income and paid taxes on that amount in the year of the conversion. Further assume that two years ago I converted $100,000 from an IRA into the same Roth and paid taxes on the converted amount. Further assume the investments in the Roth have performed well and the value of the Roth is now $1 million. How would I compute taxes if I withdrew the entire $1 million today? In other words, does the five-year rule apply separately to each conversion amount or does the clock start for all conversions when the conversion Roth is first established?

Thanks,

Bob

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The tricky business of Roth conversion