We plan on converting a portion of a traditional IRA to a Roth IRA. If the amount we convert plus our other income exceeds the cap of $193,000, are we prohibited from make a contribution to a Roth IRA? For example, say our MAGI was $130,000 and we converted $100,000, is the $100,000 added to MAGI?
The amount of a Roth conversion is subtracted from AGI to get the MAGI - see worksheet 2-1 in IRS pub 590A
https://www.irs.gov/publications/p590a#en_US_2018_publink100025085
can we go back to the original post? Are we mixing terminology for a 'contribution' and a 'conversion'?
The contribution is subject to the MAGI of $193,000 (new money going into a ROTH)
But
the 'conversion' of money already in a Traditional IRA to a Roth IRA has no limit; you could convert the whole ball of wax in one year, no matter how big it is, if you wanted to.
@jamesrath1970 - are you trying to do both a conversion and a contribution? or were you mixing terms inadvertently?
The original question (as I understood it) asked if they did a Traditional IRA to Roth *conversion* would that conversion be added to the MAGI to limit a separate Roth *contribution* in the same year. The answer is no, as the IRS Pub 590A MAGI worksheet 2-1 says, a conversion is subtracted from the AGI to determine the MAGI for Roth contribution limits so the amount of conversion does not count.
(TurboTax follows that rule - Traditional IRA to Roth conversions are not added to the MAGI for the purpose of limiting Roth contributions.)
To be precise, the taxable amount of the Roth conversions adds to AGI and one of the modifications to AGI for the purpose of a Roth IRA contribution is to subtract that amount back out. So if your AGI is $130,000 and $100,000 of that comes from a Roth conversion your MAGI for Roth IRA contribution purposes is $30,000, assuming no other modifications. As macuser_22 indicated, TurboTax implements this properly.