SIDA!
Footballguy
Hey Guys
Looking to get a couple of answers to some pretty straightforward questions about converting a traditional IRA to a Roth IRA.
1. Assume somebody has made three annual contributions of $5,000 to their traditional IRA, invested it in the market and seen their balance drop to $12,000 from the original $15,000 contribution. If they convert, how is that $3,000 loss handled?
2. Assume somebody has made three annual contributions of $5,000 and effectively brings their traditional IRA balance to $15,000 as of December 31, 2013. For simplicity sake, no earnings were achieved by the holder of the IRA up til this point. Just sat in cash.
In 2014, they hit it big with some Amaya Gaming stock thanks to a recommendation by General Malaise, effectively doubling their account from $15,000 to $30,000. After those gains have been realized but before the end of 2014, the IRA owner decides to convert that IRA to a Roth IRA. Are they then subject to paying taxes on the entire $30,000 or just the contributions and earnings up to Dec 31, 2013?
Thanks!
Looking to get a couple of answers to some pretty straightforward questions about converting a traditional IRA to a Roth IRA.
1. Assume somebody has made three annual contributions of $5,000 to their traditional IRA, invested it in the market and seen their balance drop to $12,000 from the original $15,000 contribution. If they convert, how is that $3,000 loss handled?
2. Assume somebody has made three annual contributions of $5,000 and effectively brings their traditional IRA balance to $15,000 as of December 31, 2013. For simplicity sake, no earnings were achieved by the holder of the IRA up til this point. Just sat in cash.
In 2014, they hit it big with some Amaya Gaming stock thanks to a recommendation by General Malaise, effectively doubling their account from $15,000 to $30,000. After those gains have been realized but before the end of 2014, the IRA owner decides to convert that IRA to a Roth IRA. Are they then subject to paying taxes on the entire $30,000 or just the contributions and earnings up to Dec 31, 2013?
Thanks!