Robert L. and Sara J. Helm - Page 9




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          see also H. Conf. Rept. 105-220, at 380 (1997), 1997-4 C.B. (Vol.           
          2) 1457, 1850 (wherein the conference committee articulated the             
          intent to tax conversion income currently such that the “Amounts            
          that would have been includible in income had the amounts                   
          converted been withdrawn are includible in income ratably over 4            
          years.”); contrast with sec. 408(d)(3) (a qualified rollover                
          contribution among nonRoth IRAs is not included in gross income             
          if it meets certain requirements).  Furthermore, the pertinent              
          parts of the regulations provide:                                           
               any taxable conversion amount includible in gross                      
               income for a year as a result of the conversion                        
               (regardless of whether the individual is using a 4-year                
               spread) is included in income for all purposes.  Thus,                 
               for example, it is counted for purposes of determining                 
               the taxable portion of social security payments under                  
               section 86 * * *. [Sec. 1.408A-4, Q&A-9, Income Tax                    
               Regs.]                                                                 
               C.  Calculating the Taxable Portion of Petitioners’ Social             
          Security Benefits                                                           
               Section 86 provides for the taxability of Social Security              
          benefits pursuant to a statutory formula.  Thus, if a taxpayer’s            
          “modified adjusted gross income” (MAGI) plus one-half of the                
          taxpayer’s Social Security benefits exceeds a certain base                  
          amount, then a portion of the taxpayer’s Social Security benefits           
          is includable in gross income and subject to Federal income tax.            
          Sec. 86(a) through (d).                                                     
               Section 86(b)(2) defines MAGI as adjusted gross income, less           
          certain specified types of income plus tax-exempt interest, which           





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