Me and my wife do not qualify for Roth IRA contribution due to income limits. however, we want to contribute to tradition IRA post tax and then roll that amount over to Roth IRA for both 2010 and 2011 before 4/15/2011.
What are the tax implications of this conversion. Is it legal to do it. the contribution of $10,000 will be post tax to traditional IRA.
Yes, you can do that. You would just pay tax on any growth that might occur in the conversion….but that would be slim to none. the preferred method would be to not do the contributions and conversions in the same year. there is no rule against it, but it may be better overall.