I have a taxable account and a traditional IRA at Vanguard. Both have index funds in Vanguard ETFs. For ease of discussion, let's say my RMD is $20,000 but I need only $4,000 of that for living expenses.
I'm planning to sell $20,000 worth in the traditional IRA, transfer $4,000 of proceeds to my bank and the other $16,000 to the taxable account, and then buy shares of the same ETFs I sold in the IRA. In this way I'll avoid locking in most of this year's losses in fund values. Of course the whole $20,000 will be declared as ordinary income on my 2022 return.
Question 1: Are there any tax pitfalls to this strategy? (I don't think this would be a wash sale, since the capital loss will be in the IRA and therefore I couldn't get any tax benefit from it anyway. But please correct me if I'm wrong, or if I could be creating some other tax problem.)
Question 2: My basis in the new shares purchased in the taxable account will be that day's price, not original cost when I bought them in the IRA, right?
Question 3: I'd prefer to transfer the $16,000 to my Roth, but I don't expect any earned income this year. With no earned income I can't put that traditional IRA money into the Roth, right?
Thanks!