So when all is said and done, with the assumptions above, I would have an extra $823.92 in my pocket

As Phil said, it's closer to $275 in your pocket.

and (depending on market fluctuations over one week) I would end up with little change in value of my Roth.


The big question is, are you able to contribute any more than $4800 to your Roths for 2008, outside of the money that's in the current Roth accounts?

Because if you can contribute the $10k ($5k for each you and your wife), you will end up with a Roth that is less in value than it could have been.

Example:

If you have an additional $10,000 that you can contribute, using your method, you could only add $4,800. So, you will end up with Roth balances of $10,000. If you just added the contribution to the current Roth balance, and skipped the tax loss thing, you would end up with Roth balances of $15,200. So to gain $275 in your pocket, you have removed the ability to add an additional $5,200 to your Roths.

If, by April 15, you will have $4,800 or less that you can contribute to the current Roths, you will end up better by the $275 by doing the tax loss thing. If you can come up with any more than the $4,800, your Roth balance will be less than it could have been.

So, do you have any money, other than the money in the current Roths, that you would be using for the 2008 contribution?

AJ