Maximize Tax Deduction With Roth conversion?
Should I convert a $100,000 Traditional IRA to a Roth OR take a special $100,000 distribution from my Traditional IRA to utilize the tax deduction of a one time charitable contribution of $100,000? Thanks!
Permalink Submitted by Alan - IRA critic on Sat, 2022-08-06 23:08
If your combined marginal tax rate is 25%, the conversion would leave you with 100k in your Roth IRA and would cost you 25k in taxes paid from outside funds. A QCD would leave you with your IRA reduced by 100k, with no tax payment due. Would you have donated 100k to the charity even if you did not do a QCD?
Permalink Submitted by Don Tyler on Sun, 2022-08-07 15:54
Since we are committed to donating $100k from a taxable account with low basis stock, thought converting same amount of Tradional IRA to Roth makes sense. right? Thank!