I was told by a Merrill Lynch agent that the $100,000 AGI threshold for converting a regular IRA to a ROTH IRA has been waived for 2009; however, I cannot find confirming information to this effect. Can one of you colleagues update me on this? Thanks. Bob

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There is proposed legislation, H.R. 2814, Reinvest in America's Retirement Act of 2009.

http://washingtonwatch.com/bills/show/111_HR_2814.html#toc1

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Thanks, Ed C. I appreciate this informed response.

Also, for everyone out there, in addition to Ed C. pointing out this proposed legislation, which we all need to learn about, since I posed my original question, I found something about conversions of IRAs to ROTH IRAs that is pertinent/relevant to my question. Allow me to quote from the internet:

"IRA Conversions in 2010

...back in May of 2006 President Bush signed a $70 billion tax cut provision that changed the eligibility rules for Roth IRA conversions. Starting in 2010, taxpayers with modified adjusted gross income of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA. This change applies for one year only-2010- and the income taxes due on conversions can be spread over two years."

Wow! This is significant, especially in view of the fact that many IRA account values are down significantly because of the economic "crash" that has occurred. So, please take anything I might say here with a grain of salt, but hopefully this will give all of us some food for thought.

Other comments, contributions from other members would be appreciated. Thanks. Bob

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>>proposed legislation, which we all need to learn about<<

Why exactly do we need to learn about proposed legislation?

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Perhaps "we need to learn" about proposed legislation was a poor choice of words on my part. What I was meaning is that this area of conversion of traditional IRAs to Roth IRAs is an area with significant implications for those who advise clients in tax matters--especially in light of the fact that under law already in existence, there is a significant change for 2010, when conversion will be permitted even if AGI exceeds $100,000. Such a change would have been significant before the economic downturn, but is of even more significance now that many IRA accounts have drastically reduced values, which would make the tax cost of converting much less than before the downturn. So, this change in the law could represent a good opportunity and good tax strategy to convert to Roth IRAs, withdrawals from which generally are not subject to income tax . (So, for me personally, I am interested in any pending legislation relative to Roth IRA conversions, as I need to be as aware and informed as possible as to what is and what might be--in order to be in a position to give the best advice possible to my clients.)

I would greatly appreciate other challenges or enlightenment, as I am simply trying to learn what's what--and would be very pleased if my posts on this subject could in some way be helpful to other tax practitioners.

Regards, Bob

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