Suppose you want to convert $30K from an IRA to a Roth. Just enough to fill up to the top of your current tax bracket. Further suppose that the IRA is many times this amount, such as $100K.

Mush has been written about doing a conversion and then undoing it (recharacterize the conversion) if the market wend down and you are sitting on a loss in the ROTH.

But how about a more aggressive tactic?

Suppose you to make 2 conversions, 30K to roth#1 and 30K to roth#2, you invest differently in each roth, and then recharacterize whichever one did worst, even if both had a gain. You have to recharacterize one or the other, because you don't want to convert more than 30k.

Of course, you must do this in separate roths, because that's the only way you can keep the gains distinct.

Does this make sense? Is there any downside that I'm not seeing?

Consider something like this:
An IRA with $30K of BRK, $30K of FCNTX, $40K of SPY -- total $100k
Convert the BRK to roth#1
Convert the FCNTX to roth#2

Over the course of the year, BRK grows to $35K, FCNTX grows to $32K, SPY stays at $40K. Total $107k.

You then recharacterize the 32K in roth#2 back to the IRA. In essence, you have been able to convert whichever of the stocks that will do best, and all you have to do is some extra bookkeeping.

Make sense? Worthwhile doing?

You then recharacterize the 32K in roth#2 back to the IRA. In essence, you have been able to convert whichever of the stocks that will do best, and all you have to do is some extra bookkeeping.

Make sense? Worthwhile doing?



the point of it is not immediately apparent to me.

<<You then recharacterize the 32K in roth#2 back to the IRA. In essence, you have been able to convert whichever of the stocks that will do best, and all you have to do is some extra bookkeeping.>>

Make sense? Worthwhile doing?



the point of it is not immediately apparent to me.

</snip>

You're getting 2 swings at a pitch at the cost of some extra bookkeeping.

It probably makes more sense during a time of high market volatility where you could choose two investments likely to have greatly divergent outcomes.

intercst

It would be helpful if you would work thru the tax math with specific assumptions to compare.

Unless you are very young, I suspect you are not going to realize much in savings.

<<You then recharacterize the 32K in roth#2 back to the IRA. In essence, you have been able to convert whichever of the stocks that will do best, and all you have to do is some extra bookkeeping.>>

Make sense? Worthwhile doing?



the point of it is not immediately apparent to me.

</snip>

You're getting 2 swings at a pitch at the cost of some extra bookkeeping.



now i'm way more confused...... i'll just leave it to you all.