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IRA Conversion to a Roth Account
Use this page to perform a full conversion from your
Traditional, Rollover or SEP IRA account to an IB Roth IRA account. In
a full conversion, all assets in your Traditional or SEP IRA account are
transferred to your Roth IRA account.
The following rules and procedures apply to IRA conversions:
- For IRA
Conversions from another Custodian/Trustee, you must open an Roth IRA
account if you do not already have one.
- For IRA
Conversions from a Traditional IRA or Rollover or SEP IRA account,
you must open a Roth IRA if you do not already have one.
- We only
allow full conversions. For instructions on how to perform a partial
conversion, see Partial IRA Conversions
- If you
request a full conversion, your existing Traditional/SEP IRA account will
be closed upon completion of the transfer.
- A conversion
to a Roth IRA is subject to federal and possibly state income tax withholding,
unless you elect not to have withholding apply. You may either elect not
to withhold federal income tax or you may elect to withhold at a rate
not less than 10%.
- If federal
income tax is withheld, state income tax may also be withheld. Where state
income tax applies, the rate will be no less than the state's minimum
withholding requirement. Your state of residence (the legal address for
your IRA account), will determine your state income tax withholding requirement.
Consult your tax advisor about your tax withholding requirement.
- To qualify
for an IRA conversion, the total cash available in your Traditional or
SEP IRA account must be greater than the federal tax amount + the state
tax amount + 2% of total assets being converted. Stated as an equation,
this requirement is:
Total Cash Available > Federal Tax
Amount + State Tax Amount + 2% of total assets being converted
of securities positions from a Traditional or SEP IRA to a Roth IRA
will only be accepted between accounts with matching names and taxpayer
to IRS Publication 590, Individual Retirement Arrangements and consult
your tax advisor regarding your individual tax situation when deciding
you are opening a new account for the purpose of doing an IRA conversion
or recharacterization, you should select the funding option IRA
Conversion or Recharacterization in the Funding section of the
To perform an IRA conversion to an IB Roth
- Log into Account Management for the
Traditional or SEP IRA account you want to convert.
- Click Manage Account > Settings > IRA > IRA Conversion to Roth Account.
- In the Transfer Method list, select IRA Conversion - Transfer Assets to Roth Account.
- Enter the username, password and account
ID of the Roth IRA account to which you want to convert your Traditional,
Rollover or SEP IRA account, then click Continue.
- A confirmation number is sent to your
email address of record. Enter the number on the next screen, then
If you did not receive a confirmation number, click Request
Confirmation Number to receive a new confirmation number.
- Be sure to read and understand the
important rules governing IRA conversions before you make your Federal
and State Income Tax withholding elections.
Enter your Federal Income Tax withholding rate or elect not to have
Federal Income Tax withheld. The tax rate is a percentage of your
total account equity. Click the appropriate radio button to indicate
- On the same screen, enter your State
Income Tax withholding rate or elect not to have Federal Income Tax
withheld. The tax rate is a percentage of your total account equity.
Click the appropriate radio button to indicate your choice.
- Click Continue.
The status of your request appears on the screen.