Hi all,
Merrill Edge doesn't allow true only backdoor conversions (you have to fill out a docusign form and then submit it and then they do it on the backend) but its never caused me a problem before. Usually I submit the form, the conversion happens in about 2 days, and everything is fine.
This year with my wife's IRA when we did the conversion from Traditional to Roth, the form was submitted but nothing happened for 20 days (money stayed in the traditional IRA). We called in and had to talk to support twice but finally got them to trigger the conversion.
However the activity in the accounts shows something different than every other time and I want to make sure this won't cause issues when filing taxes next year. Every other time I've done this the accounts show a transaction description of the following which makes it clear its a conversion:
"CONVERSION DEP TRF FROM [TRADIRA#]"
This time it shows as:
"Retirement One Time Distribution"
It looks like the money did go straight from the Traditional IRA to the Roth IRA account with no intermediate steps so as far as the actual dollar trail goes I think its acceptable but the word "distribution" caught me off guard because it seems like they coded it different on the backend. It looks like from the IRS documentation as long as the distribution money goes into another retirement account (which it went into the Roth IRA) within 60 days then that piece should be fine: https://www.irs.gov/retirement-plans/pl ... tributions
However on the Roth side since it doesn't say conversion will that cause an issue with the backdoor process? Does anyone know if this would be treated as an actual contribution to the Roth as opposed to a conversion?
Thanks!
Merrill Edge doesn't allow true only backdoor conversions (you have to fill out a docusign form and then submit it and then they do it on the backend) but its never caused me a problem before. Usually I submit the form, the conversion happens in about 2 days, and everything is fine.
This year with my wife's IRA when we did the conversion from Traditional to Roth, the form was submitted but nothing happened for 20 days (money stayed in the traditional IRA). We called in and had to talk to support twice but finally got them to trigger the conversion.
However the activity in the accounts shows something different than every other time and I want to make sure this won't cause issues when filing taxes next year. Every other time I've done this the accounts show a transaction description of the following which makes it clear its a conversion:
"CONVERSION DEP TRF FROM [TRADIRA#]"
This time it shows as:
"Retirement One Time Distribution"
It looks like the money did go straight from the Traditional IRA to the Roth IRA account with no intermediate steps so as far as the actual dollar trail goes I think its acceptable but the word "distribution" caught me off guard because it seems like they coded it different on the backend. It looks like from the IRS documentation as long as the distribution money goes into another retirement account (which it went into the Roth IRA) within 60 days then that piece should be fine: https://www.irs.gov/retirement-plans/pl ... tributions
However on the Roth side since it doesn't say conversion will that cause an issue with the backdoor process? Does anyone know if this would be treated as an actual contribution to the Roth as opposed to a conversion?
Thanks!
Statistics: Posted by wannabeinvestor — Fri Jan 26, 2024 4:44 pm — Replies 0 — Views 103