Could income from a Roth IRA conversion trigger the alternative minimum tax?
The alternative minimum tax, or AMT, is basically a parallel tax structure that was designed to keep the wealthiest Americans from using certain deductions and credits to avoid paying taxes. In recent years, it has affected more and more middle-income taxpayers because the amount of income that can be excluded from AMT hasn’t been indexed for inflation. Because any taxable income a Roth conversion produces is considered ordinary income, there’s no preferential tax treatment, and so, generally speaking, it may not trigger AMT. If you’re subject to AMT, you may want to discuss this with your accountant.
