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Originally Posted by Boomer
rg, I understand that about ordinary income tax. But in paragraph 2 of my quote I was talking about cap gains on a taxable account stock sale.
Hey, maybe you can answer this question for me about Roth conversions. Can stocks be transferred in-kind from a traditional IRA to a Roth if the ordinary income tax is paid on the face value of the stock at the time of the transfer?
Btw, I think converting, once in a while, on the way to 70 and 1/2 can work out as a good option if the tax year projection is shaking out to make sense to do it while you can.
And you are absolutely right about how quickly costs of nursing home and long care can pile up. But it would still be better if they had left the in excess of AGI percentage at 7.5%. Actually, I am pretty sure that just before the tax law changed, it was 10% except for those over 65 — who got 7.5%. Too bad they could not have left that age 65 thing alone.
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Yes, you can do a ROTH conversion of in-kind stocks from a traditional IRA, and pay income tax on the value of the stock. Personally, I don't think it is a good idea to do ROTH conversions in most cases. But, I did have a friend who converted all of his traditional IRA to a ROTH over a period of years. His reasoning was that he wanted his children to inherit his money with no tax hassles and no tax liability. This made sense to me because an inherited taxable IRA is very complicated to deal with, whereas a ROTH presents no problem for your children. By the way, you can thank the ACA law for the 10 percent medical deduction rule. It was one way to fund the bill.