@FLfiler21 wrote:
Oddly to me, I'm never asked which IRA it was placed back into. There are two standard IRA accounts in addition to the Roth.
That is because you only have one Traditional IRA that can be broken into any number of accounts, but for tax purposed that are all the same IRA.
Traditional IRA's are "before-tax" accounts meaning that you pay the tax when you take the money out. Roth IRA' are "after-tax" accounts meaning you pay the tax before you put the money into the Roth.
You can convert a Traditional (before tax) IRA to a Roth (after-tax) by paying the tax on the money. You cannot go the other way around because it is not possible to put after-tax money into a before-tax account. Tax law does not permit that.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
