A Guide To The Retirement-Related Provisions In The Senate Coronavirus Stimulus/Relief Bill

[progree]

1. Good, I was projected to take a $12,800 RMD this year on my inherited IRA, but now I have that much

more that I can convert to Roth without hitting another tax bracket or having to pay a Medicare premium surcharge 2 years later.

By the way, probably a wonderful time to do a Roth conversion, since with stock prices low, for a given amount of dollars that one has to pay taxes on, one gets to convert more shares.

E.g. if I'm targeting a $20,000 Roth conversion:

# In a good market, if share price is $20, then I convert 1,000 shares from Traditional IRA to Roth

# In a bad market, if share price is $10, then I convert 2,000 shares from Traditional IRA to Roth

In the bad market example above, one converts twice as many shares for the same tax hit: $20,000 X one's effective marginal tax rate

The legislation waives the required minimum distributions for IRAs and other individual retirement accounts for calendar year 2020.

Another tax tip: to look at stuff in regular taxable accounts that one has been reluctant to sell because of capital gains taxes, but otherwise would like to get rid of. Well, now in the bad market, the capital gain will be less or maybe zero or a capital loss ... I did that in 2008-2009.

Not that the market is that much down -- S&P 500 closed Friday, down 25% from February's all time high and above the levels of 3 years ago, but something to watch as coronavirus cases in U.S. keep 10-folding every 8 or 9 days.
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