By saying "taxable", I was just trying to distinguish from not using a tax-advantaged account to pay the taxes since those accounts could have also dropped 50%. Yes, uninvested cash was meant (or money that isn't yet in any account, such as withholding from a pay check that is going to the IRS).No. It's better to pay tax from cash on hand, but it can still be good to convert (vs. not convert) even if the tax must be paid from the conversion itself.But this true only if you pay the taxes from taxable, rather than the conversion itself.
Yes, I paid 24% on the half-priced shares being converted (as I originally said). I ended up with the same result as if I had converted and paid 12% taxes when the shares were full price.No, it wasn't, and it would be good not to mislead people this way. You paid 24% to convert. Period.The markets rebounded quickly (luckily) and my Roth then had $200k in it. It was as if I had paid 12% for the Roth conversions for the fully-valued shares.
Is this ok with you now, FiveK? I don't understand why you are disagreeing with me here.
And your last example isn't valid in # 2.
You are no longer using "fresh" cash to pay the taxes but money that was invested (and apparently was invested like the shares that were to be converted). Instead, you should be paying the tax as if it was withholding going to the IRS.
Statistics: Posted by celia — Sat Nov 23, 2024 3:53 am