SlideShare una empresa de Scribd logo

Advanced Topics in Roth Conversions

•Descargar como PPT, PDF•
•
B
BenLJennings

This document provides an overview and agenda for a presentation on advanced topics related to Roth conversions. It discusses nine critical issues that can arise for clients in real-world Roth conversion situations, beyond the basic principles. The presentation will cover examples for different client profiles, real-world complications, and take questions from the audience.

1 de 113
Advanced Topics in Roth Conversions 9 Critical Issues for Real World Clients www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Welcome! An Overview of Our Schedule ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Housekeeping ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Introductions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
A Brief History www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Traditional IRAs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Enter William Roth… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
And in 1997 – Roth Turned The IRA Upside Down www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Vive la Difference www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The “Traditional” IRA Getting Money In - Eligibility ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Roth IRA Getting Money In – Eligibility ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Getting Money In: Contribution Amount – Either Type ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Distribution Distinctives Note: Roth IRA ≠ Roth 401k, etc. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Qualified Roth Distributions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
What if the distribution isn’t qualified? A: Turn to the “Ordering Rules” www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Ordering Rules in Detail ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Why do we care about the Ordering Rules? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Don’t be confused…. 5 Years ≠ 5 Years ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
So to recap, just remember that a Roth creates two issues in one! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Let’s be clear: How about taxation of earnings in a Roth? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Old Switcheroo… Basic Principles Applicable to the Conversion Analysis www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Mathematics of Conversion: Part 1: It’s a Bracket Racket ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Example www.SoundViewAdvisors.com Advanced Topics in Roth Conversions Traditional Roth Current Pre-Tax Balance $100,000 $100,000 Less: Conversion Tax @ 25% - (25,000) Current After-Tax Balance $100,000 $75,000 Assumed Growth 400% 400% Pre-Tax Balance (Yr 30) $400,000 $300,000 Less: Income Tax on Withdrawal @ 25% (100,000) - After-Tax Balance (Yr 30) $300,000 $300,000
The Mathematics of Conversion: Part 2: Diminishing Returns ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Mathematics of Conversion: Part 3: Outside is Better ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Mathematics of Conversion: Part 4: Longer is Better ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Mathematics of Conversion: Part 5: Married is Better Than Single ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Mathematics of Conversion: Part 6: Income Tax is Better Than Estate Tax ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Mechanics of Conversion ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Frequency of Conversion ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Do-Over: Recharacterization ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recharacterizations Must Include Attributable Income ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recharacterizations Must Include Attributable Income ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Who Wins? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Key Factors - ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Conversion Factors & Typical Client Profiles www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Young Couple ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Middle America Retirees ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
High Net Worth Clients ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Late Life Widow ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
If Only It Were That Easy… Planning Under Uncertainty www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Source 1 of Uncertainty: Taxation ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
The Most Commonly-Anticipated Uncertainty: Increasing Brackets ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
There’s More Than One Way to Skin a … ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Those Roths seemed like a good idea at the time…. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Or maybe it wouldn’t have to do with Roth IRAs at all…. ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Let’s pick ourselves up, dust ourselves, start all over again? ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
How might state income taxes play into this? ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Estate Taxes ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Source 2 of Uncertainty: Economics ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
More Economic Uncertainty ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
More Economic Uncertainty ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Source 3 of Uncertainty: Client Situation & Preferences ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
More Uncertainty in the Client Situation ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Further Uncertainty in the Client Situation ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Further Uncertainty in the Client Situation ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Dealing with Uncertainty ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Uncertainty and the Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Uncertainty & Our Approach ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Uncertainty & Our Approach ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Conversions in the Real World Practical Considerations www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
9 Critical Issues / Considerations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recharacterizations ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recharacterizations Timeline www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
“Must we extend, or can we amend?” ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Why Might We Recharacterize? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions We may want to revisit the current vs. future tax rate evaluation… Market Value of Account Stable Increased Decreased Value @ Conversion Date $100,000 $100,000 $100,000 Tax @ 25% $25,000 $25,000 $25,000 Value @ Potential Recharacterization Date $100,000 $125,000 $75,000 Effective Tax Rate on Conversion 25% 20% 33%
One More Reason to Pay Tax with Outside Funds… ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Mechanics of Recharacterization ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recharacterization may lead to… ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Reconversion Dates ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy ,[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy Is it worth the hassle? ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy Is it worth the hassle? ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Roth Segregation Strategy Is it worth the hassle? ,[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Let’s recap the advantage: ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
2010 Conversions Pay Now or Pay Later? ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
2010 Conversions Why pay sooner? ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
2010 Conversions: When do we pay? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
2010 Conversions Pay Now or Pay Later: Can We Do Both? ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
2010 Conversions Pay Now or Pay Later ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Dealing with After-Tax Money: The Rules ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
“Cream in the Coffee”: An Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
But I don’t like cream in my coffee… Is there anything I can do? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
So Much for Cream in the Coffee! We Have a “Centrifuge” www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Isolation is Good! An Example of Isolating Basis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Who /what can convert to a Roth IRA? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
What About Inherited Plans? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Who /what else can convert to a Roth? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Oh, that’s connected to this…: Medicare, Part 1 ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Another linkage…: Medicare, Part 2 ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
How about connections with that other social program? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
What impact might a Roth conversion have on this? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Are these effective tax rates what you expected? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
An equal-opportunity complication for the younger generation, too ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Tax Planning Traps ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Tax Planning Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Portfolio Management Issues: Asset Location Factors ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Portfolio Management Issues: General Rules ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Asset Allocation/Location www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Estate Planning Issues ,[object Object],[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Estate Planning & Administration: Items to Consider ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Additional Considerations ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Do You Have Questions? (Alternatively, Any Answers?) www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Wrapping Up www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Recap: 4 Potential Types of Roth IRA Conversions ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Slam Dunks are Rare ,[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Collegiality ,[object Object],[object Object],[object Object],[object Object],www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Conclusion You’ve learned about us: We want to learn about you! www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
Thanks for joining us! www.SoundViewAdvisors.com Advanced Topics in Roth Conversions

Recomendados

CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
Cannabis Legal Group
 
Surprising Facts of Roth IRAs
Surprising Facts of Roth IRAsSurprising Facts of Roth IRAs
Surprising Facts of Roth IRAs
Michael Aloi
 
Roth IRA Conversion
Roth IRA ConversionRoth IRA Conversion
Roth IRA Conversion
scottegg
 
Lecturer 3
Lecturer 3Lecturer 3
Lecturer 3
paarwani
 
Tax Efficient Investment Planning for (UK) Business Owners
Tax Efficient Investment Planning for (UK) Business OwnersTax Efficient Investment Planning for (UK) Business Owners
Tax Efficient Investment Planning for (UK) Business Owners
BizSmart Select
 
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt SolutionsEntreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Villamill Digital
 
Bftu 03 all clw 112703
Bftu 03 all clw 112703Bftu 03 all clw 112703
Bftu 03 all clw 112703
Anne Arundel Accounting and Taxes, Inc.
 
issues and trends in share capital
issues and trends in share capital issues and trends in share capital
issues and trends in share capital
SibraWebDev
 

Recomendados

CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
CPA Attestations for Pre-Qualifications, Accounting and 280E - Principles and...
Cannabis Legal Group
 
Surprising Facts of Roth IRAs
Surprising Facts of Roth IRAsSurprising Facts of Roth IRAs
Surprising Facts of Roth IRAs
Michael Aloi
 
Roth IRA Conversion
Roth IRA ConversionRoth IRA Conversion
Roth IRA Conversion
scottegg
 
Lecturer 3
Lecturer 3Lecturer 3
Lecturer 3
paarwani
 
Tax Efficient Investment Planning for (UK) Business Owners
Tax Efficient Investment Planning for (UK) Business OwnersTax Efficient Investment Planning for (UK) Business Owners
Tax Efficient Investment Planning for (UK) Business Owners
BizSmart Select
 
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt SolutionsEntreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Entreprenurial Relief In Terms of MVL - With Debt Specialists TC Debt Solutions
Villamill Digital
 
Bftu 03 all clw 112703
Bftu 03 all clw 112703Bftu 03 all clw 112703
Bftu 03 all clw 112703
Anne Arundel Accounting and Taxes, Inc.
 
issues and trends in share capital
issues and trends in share capital issues and trends in share capital
issues and trends in share capital
SibraWebDev
 
Exit strategies
Exit strategiesExit strategies
Exit strategies
SibraWebDev
 
Dividend tax change + profit extraction
Dividend tax change + profit extractionDividend tax change + profit extraction
Dividend tax change + profit extraction
Frank Nolan
 
Tax Issues for Startup Company
Tax Issues for Startup CompanyTax Issues for Startup Company
Tax Issues for Startup Company
Roger Royse
 
S Corp Presentation 2011
S Corp Presentation 2011S Corp Presentation 2011
S Corp Presentation 2011
Ed Forker, EA
 
Incorporation (2011)
Incorporation (2011)Incorporation (2011)
Incorporation (2011)
jgroenewold
 
Navigating Tomorrow's Tax Landscape - 2020
Navigating Tomorrow's Tax Landscape - 2020Navigating Tomorrow's Tax Landscape - 2020
Navigating Tomorrow's Tax Landscape - 2020
Skoda Minotti
 
Top tax issues for startup companies (10 3-16 revision)
Top tax issues for startup companies (10 3-16 revision)Top tax issues for startup companies (10 3-16 revision)
Top tax issues for startup companies (10 3-16 revision)
Roger Royse
 
Agribusiness Tax Planning Presentation
Agribusiness Tax Planning PresentationAgribusiness Tax Planning Presentation
Agribusiness Tax Planning Presentation
Kristina Caltagirone
 
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
Harry Rubins
 
2015 small business CGT and superannuation strategies webinar
2015 small business CGT and superannuation strategies webinar2015 small business CGT and superannuation strategies webinar
2015 small business CGT and superannuation strategies webinar
netwealthInvest
 
Financial management chapter 1 2-3
Financial management chapter 1 2-3Financial management chapter 1 2-3
Financial management chapter 1 2-3
03135074749
 
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
Harry Rubins
 
LLP vs Ltd
LLP vs Ltd LLP vs Ltd
LLP vs Ltd
Catherine Gannon
 
Idea to ipo funding 101 royse - august 11 2020
Idea to ipo funding 101 royse - august 11 2020Idea to ipo funding 101 royse - august 11 2020
Idea to ipo funding 101 royse - august 11 2020
Roger Royse
 
SEIS & EIS
SEIS & EIS SEIS & EIS
SEIS & EIS
SibraWebDev
 
Business Break-ups
Business Break-upsBusiness Break-ups
Business Break-ups
SibraWebDev
 
Structuring your business for growth
Structuring your business for growthStructuring your business for growth
Structuring your business for growth
SibraWebDev
 
Retain valuable-employees-slides
Retain valuable-employees-slidesRetain valuable-employees-slides
Retain valuable-employees-slides
SibraWebDev
 
Helen Rowe presentation to Bristol SPG May 2015
Helen Rowe presentation to Bristol SPG May 2015Helen Rowe presentation to Bristol SPG May 2015
Helen Rowe presentation to Bristol SPG May 2015
Rupert Scrase
 
¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
Antonio Gonzalez
 
Martin High School 1990 20-yr Reunion
Martin High School 1990 20-yr ReunionMartin High School 1990 20-yr Reunion
Martin High School 1990 20-yr Reunion
Steve Graber
 
Mc was introduction
Mc was introductionMc was introduction
Mc was introduction
Wasimah
 

Más contenido relacionado

La actualidad más candente

Incorporation (2011)
Incorporation (2011)Incorporation (2011)
Incorporation (2011)
jgroenewold
 
Financial management chapter 1 2-3
Financial management chapter 1 2-3Financial management chapter 1 2-3
Financial management chapter 1 2-3
03135074749
 
Business Break-ups
Business Break-upsBusiness Break-ups
Business Break-ups
SibraWebDev
 

La actualidad más candente (19)

Exit strategies
Exit strategiesExit strategies
Exit strategies
 
Dividend tax change + profit extraction
Dividend tax change + profit extractionDividend tax change + profit extraction
Dividend tax change + profit extraction
 
Tax Issues for Startup Company
Tax Issues for Startup CompanyTax Issues for Startup Company
Tax Issues for Startup Company
 
S Corp Presentation 2011
S Corp Presentation 2011S Corp Presentation 2011
S Corp Presentation 2011
 
Incorporation (2011)
Incorporation (2011)Incorporation (2011)
Incorporation (2011)
 
Navigating Tomorrow's Tax Landscape - 2020
Navigating Tomorrow's Tax Landscape - 2020Navigating Tomorrow's Tax Landscape - 2020
Navigating Tomorrow's Tax Landscape - 2020
 
Top tax issues for startup companies (10 3-16 revision)
Top tax issues for startup companies (10 3-16 revision)Top tax issues for startup companies (10 3-16 revision)
Top tax issues for startup companies (10 3-16 revision)
 
Agribusiness Tax Planning Presentation
Agribusiness Tax Planning PresentationAgribusiness Tax Planning Presentation
Agribusiness Tax Planning Presentation
 
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
Opportunities and Pitfalls:IRA, 401k, Roth IRA: Society of California Account...
 
2015 small business CGT and superannuation strategies webinar
2015 small business CGT and superannuation strategies webinar2015 small business CGT and superannuation strategies webinar
2015 small business CGT and superannuation strategies webinar
 
Financial management chapter 1 2-3
Financial management chapter 1 2-3Financial management chapter 1 2-3
Financial management chapter 1 2-3
 
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
Opportunities & Pitfalls for Inheriting IRA, 401k & Roth-IRA: Sonoma County B...
 
LLP vs Ltd
LLP vs Ltd LLP vs Ltd
LLP vs Ltd
 
Idea to ipo funding 101 royse - august 11 2020
Idea to ipo funding 101 royse - august 11 2020Idea to ipo funding 101 royse - august 11 2020
Idea to ipo funding 101 royse - august 11 2020
 
SEIS & EIS
SEIS & EIS SEIS & EIS
SEIS & EIS
 
Business Break-ups
Business Break-upsBusiness Break-ups
Business Break-ups
 
Structuring your business for growth
Structuring your business for growthStructuring your business for growth
Structuring your business for growth
 
Retain valuable-employees-slides
Retain valuable-employees-slidesRetain valuable-employees-slides
Retain valuable-employees-slides
 
Helen Rowe presentation to Bristol SPG May 2015
Helen Rowe presentation to Bristol SPG May 2015Helen Rowe presentation to Bristol SPG May 2015
Helen Rowe presentation to Bristol SPG May 2015
 

Destacado

Martin High School 1990 20-yr Reunion
Martin High School 1990 20-yr ReunionMartin High School 1990 20-yr Reunion
Martin High School 1990 20-yr Reunion
Steve Graber
 
Mc was introduction
Mc was introductionMc was introduction
Mc was introduction
Wasimah
 
Spa going the distance-final
Spa going the distance-finalSpa going the distance-final
Spa going the distance-final
Libby Clark
 
Google y PYMES: 21 casos prácticos de éxito
Google y PYMES: 21 casos prácticos de éxitoGoogle y PYMES: 21 casos prácticos de éxito
Google y PYMES: 21 casos prácticos de éxito
Antonio Gonzalez
 

Destacado (8)

¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
¿Cómo ser un community manager? Facebook, Tuenti, Twitter y Google
 
Martin High School 1990 20-yr Reunion
Martin High School 1990 20-yr ReunionMartin High School 1990 20-yr Reunion
Martin High School 1990 20-yr Reunion
 
Mc was introduction
Mc was introductionMc was introduction
Mc was introduction
 
Spa going the distance-final
Spa going the distance-finalSpa going the distance-final
Spa going the distance-final
 
Perioperative nursing
Perioperative nursingPerioperative nursing
Perioperative nursing
 
3 bab 1
3 bab 13 bab 1
3 bab 1
 
Google y PYMES: 21 casos prácticos de éxito
Google y PYMES: 21 casos prácticos de éxitoGoogle y PYMES: 21 casos prácticos de éxito
Google y PYMES: 21 casos prácticos de éxito
 
Ppt hiliary
Ppt hiliaryPpt hiliary
Ppt hiliary
 

Similar a Advanced Topics in Roth Conversions

M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
Laurie Barkman
 
Tax Efficient Investing For Life
Tax Efficient Investing For LifeTax Efficient Investing For Life
Tax Efficient Investing For Life
guesta5e2f9
 
Tax Efficient Investing For Life
Tax Efficient Investing For LifeTax Efficient Investing For Life
Tax Efficient Investing For Life
guesta5e2f9
 
Your Tax-Advantaged Invesment Solution
Your Tax-Advantaged Invesment SolutionYour Tax-Advantaged Invesment Solution
Your Tax-Advantaged Invesment Solution
OMIRAJ
 
Roth Horner Article
Roth Horner ArticleRoth Horner Article
Roth Horner Article
marchorner
 
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth ToolsUniversity at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
StanleyKon
 

Similar a Advanced Topics in Roth Conversions (20)

The Case For Roth IRA Conversions
The Case For Roth IRA ConversionsThe Case For Roth IRA Conversions
The Case For Roth IRA Conversions
 
Roth Conversions
Roth ConversionsRoth Conversions
Roth Conversions
 
Roth Conversion
Roth ConversionRoth Conversion
Roth Conversion
 
Legal Sector Update - June 2016
Legal Sector Update - June 2016Legal Sector Update - June 2016
Legal Sector Update - June 2016
 
2010 Roth Conversion
2010 Roth Conversion2010 Roth Conversion
2010 Roth Conversion
 
Advanced Topics In Roth Conversions
Advanced Topics In Roth ConversionsAdvanced Topics In Roth Conversions
Advanced Topics In Roth Conversions
 
M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
M&A and Exit Planning Trends 2021 Webinar | Hosted by Laurie Barkman, SmallDo...
 
Politics and Treasury: How the New Administration May Impact Treasury in 2017
Politics and Treasury: How the New Administration May Impact Treasury in 2017Politics and Treasury: How the New Administration May Impact Treasury in 2017
Politics and Treasury: How the New Administration May Impact Treasury in 2017
 
Tax Efficient Investing For Life
Tax Efficient Investing For LifeTax Efficient Investing For Life
Tax Efficient Investing For Life
 
Tax Efficient Investing For Life
Tax Efficient Investing For LifeTax Efficient Investing For Life
Tax Efficient Investing For Life
 
Top 10 Tax Issues for Startup Companies
Top 10 Tax Issues for Startup CompaniesTop 10 Tax Issues for Startup Companies
Top 10 Tax Issues for Startup Companies
 
Income Tax Issues for Older Adults-MTP-02-22.pdf
Income Tax Issues for Older Adults-MTP-02-22.pdfIncome Tax Issues for Older Adults-MTP-02-22.pdf
Income Tax Issues for Older Adults-MTP-02-22.pdf
 
Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...
Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...
Canadian Tax Insights: How High Net Worth Investors Should Navigate Today’s T...
 
Your Tax-Advantaged Invesment Solution
Your Tax-Advantaged Invesment SolutionYour Tax-Advantaged Invesment Solution
Your Tax-Advantaged Invesment Solution
 
Roth Horner Article
Roth Horner ArticleRoth Horner Article
Roth Horner Article
 
Issues in Transition: To sell or not to sell
Issues in Transition: To sell or not to sellIssues in Transition: To sell or not to sell
Issues in Transition: To sell or not to sell
 
Business Owner Planning Workshop
Business Owner Planning WorkshopBusiness Owner Planning Workshop
Business Owner Planning Workshop
 
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth ToolsUniversity at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
University at Buffalo Webinar - DIY Wealth Book with Ripsaw Wealth Tools
 
Top 5 strategies to keep your profits in your pocket
Top 5 strategies to keep your profits in your pocketTop 5 strategies to keep your profits in your pocket
Top 5 strategies to keep your profits in your pocket
 
Business Valuation Update & Impact of the Tax Cuts and Jobs Act
Business Valuation Update & Impact of the Tax Cuts and Jobs ActBusiness Valuation Update & Impact of the Tax Cuts and Jobs Act
Business Valuation Update & Impact of the Tax Cuts and Jobs Act
 

Advanced Topics in Roth Conversions

  • 1. Advanced Topics in Roth Conversions 9 Critical Issues for Real World Clients www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 2.
  • 3.
  • 4.
  • 5. A Brief History www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 6.
  • 8.
  • 9. And in 1997 – Roth Turned The IRA Upside Down www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 10. Vive la Difference www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16. What if the distribution isn’t qualified? A: Turn to the “Ordering Rules” www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 17.
  • 18.
  • 19.
  • 20.
  • 21.
  • 22. The Old Switcheroo… Basic Principles Applicable to the Conversion Analysis www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 23.
  • 24. Example www.SoundViewAdvisors.com Advanced Topics in Roth Conversions Traditional Roth Current Pre-Tax Balance $100,000 $100,000 Less: Conversion Tax @ 25% - (25,000) Current After-Tax Balance $100,000 $75,000 Assumed Growth 400% 400% Pre-Tax Balance (Yr 30) $400,000 $300,000 Less: Income Tax on Withdrawal @ 25% (100,000) - After-Tax Balance (Yr 30) $300,000 $300,000
  • 25.
  • 26.
  • 27.
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33.
  • 34.
  • 35. Who Wins? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 36.
  • 37. Roth Conversion Factors & Typical Client Profiles www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 38.
  • 39.
  • 40.
  • 41.
  • 42. If Only It Were That Easy… Planning Under Uncertainty www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 43.
  • 44.
  • 45.
  • 46.
  • 47.
  • 48.
  • 49.
  • 50.
  • 51.
  • 52.
  • 53.
  • 54.
  • 55.
  • 56.
  • 57.
  • 58.
  • 59.
  • 60.
  • 61.
  • 62. Conversions in the Real World Practical Considerations www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 63.
  • 64.
  • 65. Recharacterizations Timeline www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 66.
  • 67. Why Might We Recharacterize? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions We may want to revisit the current vs. future tax rate evaluation… Market Value of Account Stable Increased Decreased Value @ Conversion Date $100,000 $100,000 $100,000 Tax @ 25% $25,000 $25,000 $25,000 Value @ Potential Recharacterization Date $100,000 $125,000 $75,000 Effective Tax Rate on Conversion 25% 20% 33%
  • 68.
  • 69.
  • 70.
  • 71.
  • 72.
  • 73.
  • 74.
  • 75.
  • 76.
  • 77.
  • 78.
  • 79.
  • 80.
  • 81.
  • 82.
  • 83.
  • 84.
  • 85.
  • 86.
  • 87.
  • 88. So Much for Cream in the Coffee! We Have a “Centrifuge” www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 89.
  • 90.
  • 91.
  • 92.
  • 93.
  • 94.
  • 95.
  • 96.
  • 97. Are these effective tax rates what you expected? www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 98.
  • 99.
  • 100.
  • 101.
  • 102.
  • 103. Asset Allocation/Location www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 104.
  • 105.
  • 106.
  • 107. Do You Have Questions? (Alternatively, Any Answers?) www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 108. Wrapping Up www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 109.
  • 110.
  • 111.
  • 112. Conclusion You’ve learned about us: We want to learn about you! www.SoundViewAdvisors.com Advanced Topics in Roth Conversions
  • 113. Thanks for joining us! www.SoundViewAdvisors.com Advanced Topics in Roth Conversions

Notas del editor

  1. 5 Years for Roth: IN which conversion was made, or FOR which contribution was made