How to Avoid a Tax Event When Converting to a Roth IRA

The prarata rule is going to apply when calculating how much of that $7,000 conversion is actually taxable. So if you have outside IRA monies, you got to be careful because this praratarule is going to come into play and you could potentially create a tax event. The most common way is to roll your IRA assets into your current 401K plant.

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