Updated Thursday, October 23, 2014 as of 11:08 AM ET

Ask Ed Slott: IRA Recharacterizations

My daughter is 47 years old. She wants to convert funds from her traditional IRA to fund her Roth IRA each year. Even though she is not 59 , can she move these funds without the 10% penalty since the funds are moving from one IRA to another?

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Comments (1)
Investors can convert all of the funds in their traditional IRAs to Roth IRAs. In the year of conversion, the investor will be required to pay income taxes on the amount converted. However, the benefit is that the funds will never be taxed again, regardless of the gain earned.
Posted by KIMMY B | Monday, January 06 2014 at 10:33AM ET
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