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Financial Planning / Tax Strategies
|Subject: Re: Reinvesting Roth liquidated for a tax loss||Date: 12/8/2008 4:29 AM|
|Author: klwilbur2008||Number: 102830 of 121217|
Thanks all for catching some of my mistakes. When calculating my loss, I was including reinvested dividends, etc. as contributions.
Discounting all dividends, etc., the actual amount of my cash contributions into our Roths since their inceptions is $11,000 with NO contributions made in 2008. In 2007, I made one distribution of $2756 which reduces my current total contribution to $8244.
The Total value of the Roths is currently $5145.45. It would appear that as of today, my loss would be $3098.55.
My plan would be to liquidate the Roths at $5145.45 and immediately reinvest it into two new Roth accounts (one for me, one for my wife) as soon as the funds were made available to me (potentially less than a week). This could result in losing little or no value from the transaction (and even perhaps posting a gain if the relative fund prices decreased during the transfer)
If I had an AGI of $100,000, after the 2% rule, I could a claim $1098.55 loss. If I had a 25% tax rate, this would convert into about $823.92 into my pocket.
So when all is said and done, with the assumptions above, I would have an extra $823.92 in my pocket and (depending on market fluctuations over one week) I would end up with little change in value of my Roth.
Am I calculating everything correctly?
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