What is the right way to handle after-UK-tax IRA contributions and then a conversion into a ROth? Here are the details of what I'd like to do:
1) Ultimately I would like to contribute into a Roth account however my modified AGI exceeds the Roth income threshold so I need to do this via a conversion i.e. first into a Traditional IRA and then convert into ROth (for as long as conversion continues to be an option).
2) I will be depositing after-UK-tax money into the traditional IRA, so first question is do I need to segregate these money into a new account (I already have an IRA account from my days in the US but it's pre-tax money).
3) Then when I convert from the above account into a Roth I obviously don't want to pay US tax on that conversion given the IRA account is funded by after-UK-tax money. First question here is does the IRS acknowledge the fact that I've already paid tax on that money and thus will not double-tax me on the conversion? Second question is how do I prove that I've already paid UK tax on this money at the time that I do the conversion (i.e. what are the execution steps)?
4) Finally, if/when IRA to Roth conversion stops being an option, can I still deposit after-UK-tax money into a traditional IRA account and then withdraw at retirement age without having to pay US tax on it? (which in effect would using an IRA like a Roth)?
Thanks in advance
