@billr. Sorry I guess I didn't understand @dolphin post. This is perfect. I SHOULD roll it over to Roth IRA. It's at Scottrade so maybe best I just visit the local office.
I don't need to prove to Scottrade what my cost basis is right? I have to do it next year when I file my taxes? Basically asking if the penalty I'm paying has to be at time of conversion or at time of file taxes next year.
Also clarifying "you have no other IRA". Not sure I understand the significance. I have an IRA and my wife has an IRA. We also have 401ks. While my IRA was an old 401k rolled over to IRA, my wife's IRA was one started with after tax dollars. THIS latter IRA is the one I'm trying to convert to Roth. I trust that should be fine, yeah? Or is MY IRA guilty by association?
Sorry if I'm being stupid. I think I will sell what I own in this IRA get it converted ASAP.

1) I want to invest 100% of my money I give it to fund manager that has mandate to be 100% invested.
2) I want to invest 5% of my money I give 50% of my money to fund manager that has mandate to be 100% invested.
3) I want to invest WHATEVER percent of Money, but I dunno how much. Or I want my manager to invest WHATEVER percent she thinks should be invested. I decide how much % of this money I want to give the THIS manager.
So I can't really understand why anyone wants to believe or not believe in this. This is not a matter of opinion as to why one should or should not invest in a fund which has a mandate of being invested 100% all the time. It's like saying I don't like to scratch my nose with my left hand. I'm talking about whether you want to scratch your nose or pick your nose not whether you used your left or right hand to do either?
Why is everything in life so hard to explain?

I think Ted forgot the link to the print version so here it is:
Have value funds become too valuable?

I'm getting exposure to this sector with PRMTX. Rolling averages for all time increments over the last fifteen years are all rolling positive.

Hi Guys,
Investing can either be a simple or a very complex matter with a spectrum of intermediate approaches. I favor the most simple approach, but with a cautionary constraint. That cautionary recognition is best summarized by an Albert Einstein quote: "Everything should be made as simple as possible, but no simpler.”.
That's terrific advice that can be immediately transferred to a simple set of investment rules or perhaps more properly guidelines. Many investors have formulated their own guidelines. I have too. Here is my short list.
1. Be a long term investor, not a speculator. Trading is hazardous to wealth so set it and forget it. Stay the course.
2. Hard data beats opinions. Another word for guru is charlatan so ignore them.
3. Diversity rules. Change and fat tails happen randomly and more often than expected.
4. Costs matter greatly so keep control of them. Index when possible.
5. Don't react in haste so make portfolio adjustments incrementally.
Researchers in this field have concluded that most folks can't handle more than 4 to 7 rules. So the actionable rule list should be very limited.
I'm most interested in your actionable investment guideline list. My list is surely not cast in stone and is subject to adjustments so add to those I use or suggest a deletion if you so feel. All your comments are welcomed. Please contribute.
What simple rules do you favor when making investment decisions?
Best Regards

@ Congratulations, you beat me to the Merriman article, but in the future you should link like this:
1) Paul Merriman: Have Value Funds Become Too Valuable?
2) Give An Introduction:
For many years I have advocated that investors overweight the equity side of their portfolios toward value funds, which very often outperform more popular growth funds.
3) When possible always link in printer-friendly format.
Regards,
Ted

@davidmoran: Four your information !
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/31833/ackman-ends-the-valeant-nightmare/p1

diligence due and other
https://www.nytimes.com/2017/03/19/business/william-ackman-pershing-valeant.html

I would add Alibaba to the FANG stocks as it's had an excellent 2017 thus far ...

I Own Scharf Balanced Opportunity Fund (logox) Cash 25.11%

I think Dolphin nailed it. If you have no other IRAs, then just roll this one into a Roth IRA and you'll just pay the income tax on the gains that have taken place. The actual deposits move for free.
401k holdings don't apply at all UNLESS you roll those into an IRA. Then suddenly this little IRA becomes only a part of your total IRA holdings.
I once had this type of IRA also. When I cashed it out to buy a house, the tax due was only on the increase in value. Same concept as rolling it over.

ep1: Hope this helps !:Beginner’s Guide to Master Limited Partnership Mutual Funds
Regards,
Ted
http://mutualfunds.com/specialized-funds/beginners-guide-master-limited-partnership-mlp-mutual-funds/

I agree completly. I loved PRBLX until they bought WFC as their #1 position last summer, and continued to hold it during the bank's latest scandal. I sold out of a large position in it last fall as the scandal continued to unfold.
So much for the "G" in Parnassus's ESG investing philosophy, i guess.....

@VintageFreak - what i meant is, your 401K is not considered an "IRA asset" - at least for now. It remains a 401K until you decide to convert it. So it's irrelevant in terms of your non-deductible IRA to Roth conversion.

I still can't shake the feeling that until the IRA contributions can be made in sums equal to that of 401/403/457s ($18K vs $5500 per year) they may well be a joke down the road and/or don't allow people to save away enough for retirement. Yes, I contribute to mine each year, but if you CAN contribute more - up to a certain limit - why shouldn't we, especially if you're in a job that LETS you be a responsible saver and tuck away more while you can? Heck, if you suddenly are able to contribute $18K to an IRA while you're in a good-paying job, that can put you ahead of things if for some reason you lose that job and/or are later unable to contribute much to your retirement future. In this case, it's like you're being penalised for trying to be a responsible person and thinking proactively about your future needs.
Long story short every now and then I just think the whole IRA/Roth IRA thing is a nice thought but may not be very helpful -- or more trouble than they're worth. Ridiculous contribution limit aside, the various loopholes / hoops you have to jump through with retirement accounts, conversions, limits on contributions, required withdrawls, etc .... it's crazy.

From Matthews Funds' March Perspective Piece:

I’ve been grappling with the recent political changes in the U.S. and
wondering whether they demand a radical rethink of investment strategy.
I have come to the conclusion that the answer is no. The current climate
feels like one of confrontation—and why invest in Asia in this age of
confrontation? It’s easy to get sucked into the political climate and forget
the fundamental facts of economic growth. So, although political parties in
Europe, the U.K. and the U.S. seem particularly polarized—with nationalism,
anti-immigration, protectionism and mercantilism still dominant themes in
attracting votes—there are some things that these trends can’t change, such as
Asia’s savings, productivity and growth.

Article:
https://matthewsasia.com/resources/docs/pdf/Perspectives/US-AgeOfConfrontation-Mar-17.pdf

I think I see where people are getting confused with 401(k)s. VF gave too much info.
Wife made non-deductible contribution to "piddly IRA". That's the current state of affairs, it doesn't matter how she got there.
The back story (which is irrelevant) is that wife decided in the past to make the non-deductible contribution because there's a rule saying you can't deduct a contribution to a traditional IRA if:
(a) you are participating in a plan at work such as a 401(k), and
(b) your income exceeds $119k in 2017.
https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work

I think you mean non-deductible contributions. In Roth IRA leagalize, "qualified" generally refers to "distributions" (withdrawals). Distributions are said to be qualified if they meet the five year rules and you're over 59.5 or meet some exception.
https://www.irs.gov/publications/p590b/ch02.html#en_US_2016_publink1000231061
"Qualified" is also used to describe employer plans that satisfy section 401(a) of the tax code (e.g. 401(k) plans). A completely different subject.
http://www.360financialliteracy.org/Topics/Retirement-Planning/Retirement-Planning-Basics/What-does-the-term-qualified-plan-mean

The link is a nice try, but is talking about something different - money in employer-sponsored plans (e.g. 401(k)s). With all due respect to LLJB, I think you might be advised to ignore it, at least for now. Especially given your question asking to clarify whether 401(k) assets count in this IRA question.
Short answer - they don't; that's why I'm suggesting you pay no attention to 401(k) rules for now.
The only way your wife's 401(k) plan could mess with the IRA Roth conversion is if your wife rolled over the 401(k) money into an IRA (the existing one or a new one) before doing the conversion. Don't do that, and you're fine.
Dolphin's got it exactly right.
==========
Other details include:
- Since this is wife's first Roth IRA, she'll have to wait five years to get post-conversion earnings out without taxes
- If converted money is withdrawn in less than five years and wife is under 59.5 at the time, then there's an extra penalty. (The reason is that this is viewed as a backdoor for getting money out of the original IRA before age 59.5, which would have that penalty.)
Here's a description of the general 5 year rule for all Roths (explaining the first item above):
http://fairmark.com/retirement/roth-accounts/roth-distributions/tax-free-distributions-from-roth-iras/
Here's a description of the Roth conversion/early withdrawal penalty issue (second item):
http://fairmark.com/retirement/roth-accounts/roth-distributions/distributions-after-a-roth-ira-conversion/