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IRA to Roth IRA Conversion - Which Funds to Sell?
Old 12-21-2018, 10:30 AM   #1
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IRA to Roth IRA Conversion - Which Funds to Sell?

Want to do some IRA to Roth IRA conversions and have a question on which funds to sell, if it matters. Here is the situation: I have funds that have gains, and some that have losses. In my after tax accounts I would (and have) taken advantage of tax loss harvesting. But in the IRA, since it is all pre-tax money, is there an advantage to selling a fund with current negative gain vs one with positive gain? I can't seem to figure out if there is an advantage or not? Does a loss in value help offset any of the tax that would be due? Appreciate any help so I can make the best decision.
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Old 12-21-2018, 10:43 AM   #2
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I would convert funds that have lost the most value. This way I am converting more shares.
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Old 12-21-2018, 10:43 AM   #3
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There is no advantage or disadvantage.

I would suggest that yodo your tax-loss harvesting and taxable account transactions first, then Roth converison then rebalancing in the IRA.

I invested my Roth in Total Stock... so when I did a Roth conversion I would exchange/sell Total Stock in my IRA for/buy Total Stock in my Roth so my AA was unchanged by the Roth conversion.

Then I would rebalance to target in my IRA.
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Old 12-21-2018, 10:50 AM   #4
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on my conversions I transferred in kind shares from IRA to Roth Ira no selling and not out of market. No advantage I see in harvest selling capital losses or capital gains when in Roth or IRA. I do try and convert when I feel market is low so I can convert/ transfer more shares. Sometimes my timing is right sometimes not so much.
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Old 12-21-2018, 10:54 AM   #5
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The Roth conversions that I have done were an exchange but didn't have to be the same ticker... so I suspect that they were really a sell and a buy. I don't see any advantage to an in-kind transfer between an IRA and a Roth.
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Old 12-21-2018, 10:58 AM   #6
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The Roth conversions that I have done were an exchange but didn't have to be the same ticker... so I suspect that they were really a sell and a buy. I don't see any advantage to an in-kind transfer between an IRA and a Roth.
Generally I agree but the shares are in a closed fund I want to continue to hold.
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Old 12-21-2018, 12:13 PM   #7
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Quote:
Originally Posted by pb4uski View Post
The Roth conversions that I have done were an exchange but didn't have to be the same ticker... so I suspect that they were really a sell and a buy. I don't see any advantage to an in-kind transfer between an IRA and a Roth.
You don't have the fee for 2 trades.

Besides that, it's less work, as don't have to sell and they buy , while hoping to time it correctly to break even or possibly buy at less than what it sold for. Which is awkward as there is a multi-day delay due to the transfer of money process.
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Old 12-21-2018, 12:15 PM   #8
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Generally I agree but the shares are in a closed fund I want to continue to hold.
Or what if the shares are traded rarely, as in 200 per day, too much work to trade them.
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Old 12-21-2018, 12:36 PM   #9
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You don't have the fee for 2 trades.

Besides that, it's less work, as don't have to sell and they buy , while hoping to time it correctly to break even or possibly buy at less than what it sold for. Which is awkward as there is a multi-day delay due to the transfer of money process.
I don't pay a fee for any trades or exchanges so that isn't a factor. With Vanguard the sell/buy... aka exchange... are both done in one user transaction... even if different tickets.
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Old 12-21-2018, 04:12 PM   #10
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Thanks for the replies. I can see where doing an in-kind exchange would make it easy. But the answer as to if there is any tax advantage that I was trying to figure out is that there is none, but by choosing some of the loss funds I may be able to exchange more shares now. Timing now when the market has been down is why I am considering the exchange now, not because of an exchange up to tax percentage limit.


Thanks to all for the replies and discussion.
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