Pablo and his wife Bernita are both age $45.$ Thelr combined AGI Is $$90,000.$ Nelther is a participant in an employer$-$sponsored retirement plan. They have been contributing to a traditional IRA for many years and have built up an IRA balance of $$120,000.$ They are considering rolling the traditional IRA Into a Roth IRA.

Requlred:

a$.$ Is the couple eligible to make the conversion?

b$.$ Assume that the couple does not make the conversion but, Instead, establishes a separate Roth IRA In the current year and properly contributes $$2,000$ per year for four years, at which point the balance in the Roth is $$21,000($contributions plus investment earnings$).$ At the end of four years, they withdraw $$12,000$ to pay for an addition to their house. What is the amount of withdrawal that is taxable, If any?

c$.$ Assume same facts as in requirement $b,$ except that they instead withdrew only $$6,000.$ What is the amount of withdrawal that is taxable?

d$.$ What if the $$12,000$ withdrawal is used to pay qualified education expenses for their daughter who is attending college?

a$.$ Is the couple eligible to make the conversion?

b$.$ Taxable amount of withdrawal

c$.$ Taxable amount of withdrawal

d$.$ Taxable amount of withdrawal