tag:blogger.com,1999:blog-8266940130364264985.post6509217521248876557..comments2011-03-03T05:17:06.679-08:00Comments on BleedTravel Has Moved: Make Thousands of Dollars by Converting an IRA While TravelingUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8266940130364264985.post-68810238847845720532009-09-16T15:57:30.158-07:002009-09-16T15:57:30.158-07:00Daniel,Granted, my focus in my profession as a CPA...Daniel,<br><br>Granted, my focus in my profession as a CPA is in audit, not tax, but I find a few errors in your logic (unless I'm missing something)<br><br>1) When you convert from a traditional IRA to a Roth, you pay taxes on the full amount you convert. So not only did you just lose all the tax money you saved, but you'll pay taxes on the profit you made since you started your traditional IRA.<br><br>2) You can take your money out if it's been in for five years AND you're over 59 1/2. Otherwise, you need one of the exceptions noted above.<br><br>Unless there is some loophole I don't know about.jakerm1http://www.blogger.com/profile/05967366453386200901noreply@blogger.comtag:blogger.com,1999:blog-8266940130364264985.post-51262697068925825612009-09-21T17:02:10.141-07:002009-09-21T17:02:10.141-07:00Response from Daniel:1) Yes, you pay taxes on the ...Response from Daniel:<br><br>1) Yes, you pay taxes on the full amount you convert, but if you read what I said, you're paying taxes in a year you're making no other income (since you're on the road) so your taxes are minimal to non-existant, definitely massively less than the tax savings you had in years you had full income.<br><br>2) On a Roth IRA conversion, you can take out the direct contribution (the money you converted out of the traditional IRA, but NOT any earnings you have accumulated from the contribution in those five years--i.e. stock profits, etc.) after five years penalty free. As far as the government is concerned, you paid taxes on that money and it is yours. Any earnings in that time, though, are subject to tax and penalty if you take them out before 59 1/2.<br><br>Hope this clears up the confusion.Daniel Reynolds Riveironoreply@blogger.com