Pro rata is a term used to describe a proportionate allocation. It's a method of assigning an amount to a fraction according to its share of the whole.

High earners who execute the backdoor Roth IRA correctly still generate an unnecessary tax bill through one specific timing error. The strategy itself is sound. The execution is where the money leaks.

A backdoor Roth IRA can be a great resource to minimize taxes when you retire in exchange for some additional taxes right now ...

In furtherance of its efforts to provide guidance related to the implementation of tax law changes that are part of the One Big Beautiful Bill Act of 2025 (OBBBA), on December 4, 2025, the IRS issued ...

Non-deductible IRA contributions can create serious headaches. Learn how a reverse rollover can avoid the pro-rata rule, simplify recordkeeping, and prevent double taxation. The regular rollover ...

Every year, thousands of high earners follow the same advice: make a non-deductible traditional IRA contribution and immediately convert it to a Roth. The backdoor Roth strategy is legal, ...

The United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) ruled on December 31, 2024 that Serta Simmons Bedding’s (“SSB”) 2020 uptier exchange included a transaction that, ...

Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets ...

The pro-rata rule taxes conversions based on the ratio of pre-tax to after-tax IRA assets, potentially making the tax bill substantially worse; remediation requires reconstructing basis with IRS Form ...