Fidelity: Transferring directly from taxable account to Roth IRA
I know I should probably ask fidelity this, but thought I'd ask the blind community first: Fidelity gives me the ability to transfer my taxable individual account (with only my Amazon stock vests in it) to a Roth IRA directly up to $6000 a year. A.) What exactly is happening when I do that? B.) Being that this already was taxed when the RSUs were vested, it won't create a taxable event again right? C.) Normally to do backdoor Roth you have to go through an IRA first. But this seems to be skipping that step. What's going on? D.) Will I incur capital gains taxes for this?
You are most likely not eligible to make a Roth IRA contribution (that's what this is).
As I said, you can do this. But normally you have to go through the extra step of putting it into an IRA first then transfer to a Roth IRA. There is no income limit on Roth ira conversion. But fidelity gives me the option to just transfer directly. I'm wondering if in the background they involve an intermediary IRA to fit with the law.
This doesn’t sound like a back door Roth so agree with google. Fidelity doesn’t know your income so doesn’t prevent you from contributing directly to a Roth but IRS mya ask you to move this money out and pay taxes on it
You need to pay capital gain you might have