New Roth Conversion Rules for 2010

As of January 1, 2010, the Roth IRA conversion eligibility restrictions are eliminated. Most investors are now eligible to convert to a Roth IRA. Before January, investors - both single and married couples - with modified adjusted gross incomes greater than or equal to $100,000 were ineligible for Roth IRA conversion. Married investors, filing separately, were also ineligible to convert regardless of income.

Investors who convert in 2010 have the option to spread their tax liability by including half of the conversion amount in their 2011 tax return and half in their 2012 tax return. In subsequent years, investors will have to pay all taxes the year they convert.

These changes only apply to conversions; the income restrictions will still apply for annual contributions.

As always, feel free to contact a Client Services Representative with any questions. Due to the important tax consequences relating to IRAs, you may want to consult your tax advisor about your particular situation.