[retiredguy123]

Originally Posted by Fltpkr

This thread seems to have been diverted into a budget debate, but returning to the original post, whether to take advantage of this gets a bit complicated and tedious (at least for my brain).

If the bill is passed, and if it applies to those who are already taking RMDs and if it allows 2022 amounts already taken to be rolled back into the tax deferred account, wouldn’t one need to consider where the money will come from to pay back the amount of RMD already taken? E.g., If you have to sell investments from taxable investment accounts to come up with the rollover cash you need (assuming you don’t have that much cash sitting around), you will be selling into a very down market to pay back RMD amounts perhaps taken in a higher market - maybe a much higher market. Also, if the investments you sell still have gains, you will be paying federal gain tax on those gains.

The benefit is that you won’t have to pay ordinary income tax on your RMD in 2022, and the roll over money that you pay back presumably will be going back into the tax-deferred account in a down market, so you are buying more stock with the rollover money. So, I think, the sale and purchase in the current down market may wash out, and you would need to weigh the gain tax now paid on the taxable sale against the ordinary income tax on the RMD saved in 2022. However, that ordinary income tax will eventually have to be paid in a future year and maybe at a higher tax rate. I would need to think thru this very carefully to see what the benefit would be. This is all probably too detailed, sorry about that.

If you withdrew money from an IRA this year, bought stock, and then sold it a few months later, I don't think you will be having much of a gain. But, if you do, that would be a taxable gain, since it wasn't inside of your IRA when you bought and sold it.