Apr 22

Question by Maximus4488: Is tax on an IRA distribution that is converted to a Roth considered unearned income?
Last tax year 2009, I chose to convert $ 5000 of my kids Traditional IRA to his Roth IRA. I understand that the $ 5000 will be taxable to him. However, is the taxable amount considered unearned income to him and now subject to”Kiddy Tax” ?

Best answer:

Answer by the tax lady
Yes, it’s unearned income and subject to kiddie tax.

If it’s not on a w-2, it’s kiddie tax–that also includes IRAs, unemployment, etc.

He will have to file a form 1040 with an 8615 attached.

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