Quote:
Originally Posted by SoReady
If I move money from tIRA to Roth and to keep the same allocation I move to the same fund, what difference does it make if it is in an up market or down market?
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Taxes.
Say for the same asset, assuming 25% marginal bracket.:
April price: $15/share -> convert 1,000 shares for $15,000, tax $3,750
July price: $10/share -> convert 1,000 shares for $10,000, tax $2,500
October price: $5/share -> convert 1,000 shares for $5,000, tax $1,250
Alternately:
April price: $15/share -> convert 1,000 shares for $15,000
July price: $10/share -> convert 1,500 shares for $15,000
October price: $5/share -> convert 3,000 shares for $15,000
Tax for each of those conversions is $3,750 but for the October conversion, you were able to shelter a lot more shares in the Roth than with the April or July conversion.