04-07-2015, 11:55 PM
(This post was last modified: 04-07-2015, 11:58 PM by Dividend Watcher.)
CritMass,
You shouldn't have to sell and re-buy when going from a traditional to a Roth IRA. You should be able to do an in-kind transaction from one account to the other. That's a brokerage issue unless they are at different brokerages. In that case, usually the current broker will require a liquidation before doing a transfer to the incumbent. The taxable value will be of the date of the actual transaction.
Also, take a look at the tax ramifications such as your marginal tax rate now and what you expect at the time RMDs begin. It may be more advantageous to leave it as is and pay the taxes when you make the RMDs. Instead, you could be better off to just start contributing to the Roth and not add any more to the traditional.
twil,
See above. Also, you have until April 15th to add to an existing Roth. If you are just planning to open a Roth, you've missed the deadline. According to the way I read the code, the account has to have been in existence before December 31st to make prior year contributions to it. That would be a good question to ask your tax professional.
You shouldn't have to sell and re-buy when going from a traditional to a Roth IRA. You should be able to do an in-kind transaction from one account to the other. That's a brokerage issue unless they are at different brokerages. In that case, usually the current broker will require a liquidation before doing a transfer to the incumbent. The taxable value will be of the date of the actual transaction.
Also, take a look at the tax ramifications such as your marginal tax rate now and what you expect at the time RMDs begin. It may be more advantageous to leave it as is and pay the taxes when you make the RMDs. Instead, you could be better off to just start contributing to the Roth and not add any more to the traditional.
twil,
See above. Also, you have until April 15th to add to an existing Roth. If you are just planning to open a Roth, you've missed the deadline. According to the way I read the code, the account has to have been in existence before December 31st to make prior year contributions to it. That would be a good question to ask your tax professional.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan