I haven't seen any comments on IRA Roth conversion as pertains to stocks, etc. that have experienced a significant drop. It would seem that a partial conversion makes sense, assuming you plan to hold the stock anyway (ie. Oil in 1995 vs. 1998 vs. 2000). Even if the stock just came back to the purchase price, in the long run it would result in a much better return due to the tax effect. I am not suggesting market timing, but rather the selective movement of temporarily depressed assets.
> I haven't seen any comments on IRA Roth conversion > as pertains to stocks, etc. that have experienced> a significant drop.That's one silver lining in this down market. If you were considering converting a Traditional IRA to a Roth, you can now do so with reduced tax impact. You'll pay lower taxes now on the amount moved from the Traditional than you would have had you converted at the market's peak in early 2000. When the market recovers later, it will do so tax free in your new Roth IRA and you'll never pay income tax on those subsequent gains.
Do a like kind exchange with the stocks, no brokerage and get a new low basis. Pay the smaller amount of taxes on the conversion and eventually, If they come back, you may be better off.Gulfsailor
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