Yes, it is possible to move your traditional IRA into self-directed Roth IRA. It is actually called a "conversion", which is taxable event since you are converting pre-tax dollars that you contributed to a traditional IRA into Roth IRA, which is after tax. So to be sure to consult with your tax advisor to make sure you understand the tax implications. Overall it is a good strategy, pay tax on the seed, not the harvest.
Yes, it is possible to move your traditional IRA into self-directed Roth IRA. It is actually called a "conversion", which is taxable event since you are converting pre-tax dollars that you contributed to a traditional IRA into Roth IRA, which is after tax. So to be sure to consult with your tax advisor to make sure you understand the tax implications. Overall it is a good strategy, pay tax on the seed, not the harvest.
Thank you so much Dmitriy! What if funds are being transferred from a former spouse in a divorce and the attorneys claim that the money is tax free because it's already been taxed?
As far as I know, anytime an account is being converted from tax-deferred to a tax-free account this will trigger a taxable event including in the case of a divorce which is known as a qualified domestic relations order. See link below.
You need to speak with an expert to help you navigate this. IRS will care less for the claims of your attorney, the claims must be supported by the evidence.
Generally, funds in a Traditional IRA have not been taxed. The exception is non-deductible contributions. Those funds will be considered "basis" and are trackable using IRS form 8606. You need to get a hold of this form for the year the contributions were made. If that is the case then the basis will not be taxed on the conversion, but the earnings will still be subject to taxation when converted to Roth IRA, since the earnings have not been taxed.
As you can see things can get complicated trying to sort this out, that is why you need expert's help to avoid being double taxed.