IRA Roth Conversion – Capital Gains can be offset??
Do the gains (conversion amount) of a traditional IRA get offset against capital loss carryovers before tax is calculated on the remaining amount? I am in the 22% bracket now, and expect to be in the 12% after retirement, so best case is to begin converting after retiring, and I had hoped to be able to apply carryover losses to the conversion amounts.
Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2021-09-09 21:59
Cap losses can only be applied against 3000 of ordinary income after offsetting any cap gains for the year, so these losses will not help much in offsetting larger conversions. On the other hand, if you had a net operating loss from a company you own, up to 80% of an NOL can be used to offset ordinary income.