Ed_The_Gypsy
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I am trying to move as much as I can from my traditional IRA into a Roth or Roths before I turn 70.5 due to the Tax Torpedo.
In February, I moved my holdings of two energy stocks worth about $38k and $28k at the time into separate new Vanguard Roths (call them Roth A and Roth B) by the back door. They have dropped a lot more than I expected, about $9,000 altogether, but I think they have bottomed out. I figure I should recharacterize soon, but I do not understand the rules well enough and the Vanguard rep only confused me.
What I have in mind is to
1) Create another two new Roths again (call them Roth C and Roth D).
2) Put (say) $38k cash into Roth C and $28k cash into Roth D from my trad IRA by the back door again. I have the cash in the trad IRA.
3) Immediately buy those two stocks again in the new Roths.
4) Afterwards, recharacterize the original two Roths, Roth A and Roth B, returning those original two stocks back into my trad IRA.
5) Sell the two stocks now back in my trad IRA.
I should mention that even though the values have dropped, the number of shares of both have increased in the meantime as dividends were reinvested.
Does this idea make sense? Is it allowed?
Thanks,
Ed
In February, I moved my holdings of two energy stocks worth about $38k and $28k at the time into separate new Vanguard Roths (call them Roth A and Roth B) by the back door. They have dropped a lot more than I expected, about $9,000 altogether, but I think they have bottomed out. I figure I should recharacterize soon, but I do not understand the rules well enough and the Vanguard rep only confused me.
What I have in mind is to
1) Create another two new Roths again (call them Roth C and Roth D).
2) Put (say) $38k cash into Roth C and $28k cash into Roth D from my trad IRA by the back door again. I have the cash in the trad IRA.
3) Immediately buy those two stocks again in the new Roths.
4) Afterwards, recharacterize the original two Roths, Roth A and Roth B, returning those original two stocks back into my trad IRA.
5) Sell the two stocks now back in my trad IRA.
I should mention that even though the values have dropped, the number of shares of both have increased in the meantime as dividends were reinvested.
Does this idea make sense? Is it allowed?
Thanks,
Ed