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Politics : A Real American President: Donald Trump
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To: stuffbug who wrote (342410)3/28/2022 1:09:19 AM
From: didjuneau1 Recommendation

Recommended By
Honey_Bee

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I would recommend a Roth, starting from scratch. Conversions are another matter. All that built up "income" made pre-conversion is taxable at once and causes a big tax bracket jump. Plus it's still restricted from early withdrawal by penalty. Calling it a dream doesn't make it so, and doing so may encourage people in DC to think Roths could be an easy target for these types of unrealized "gain" raids.

In my case, it was a nightmare due to the tech bubble/interest hike crash and conversion taxes that were due, no matter where my stock had wound up. I can't say I've realized anything yet, so in that sense it is all unrealized - still in the brokerage with no withdrawals. Due to circumstances from that bubble and the REIT crash of 2008 and some other bad choices I made, it is a smaller amount than the taxes that I've already paid that were due at the time of the conversion.

So legally, you have a point and I was being hyperbolic to make a point, but in reality... The tax is paid, all the holdings in the account are unrealized and the total, which includes principal added since the conversion is still less than the amount of tax already paid.

The only good thing is the $3000 tax write-off to income that I will get in perpetuity for my other never to be realized bad investments!!!
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