Should I convert my Trad IRA this year?

frighteningly large marginal tax rate. I recharacterized most of my conversions each year.

would skip my conversion this year since AMT is inevitable. But then I realized I will lose my deductions to AMT whether I convert my IRA or not; so I might as well convert it.

advice, but does my proposal at least make sense (if I have already lost my deductions to AMT, a conversion can't do more damage)?

I've read enough to offer my opinion, though. Convert, but set up 3 Roths to receive the investments. When doing your

Obviously, any assets that dropped should be recharacterized. But those that shot up can be ok to leave converted even if the tax rate is higher.

The current conversion rules allow for multiple chances to convert and get the best of both worlds. Imagine how it would be to have paid 25% to convert Apple stock years ago, say sub-$100.

frighteningly large marginal tax rate. I recharacterized most of my conversions each year.

would skip my conversion this year since AMT is inevitable. But then I realized I will lose my deductions to AMT whether I convert my IRA or not; so I might as well convert it.

advice, but does my proposal at least make sense (if I have already lost my deductions to AMT, a conversion can't do more damage)?

The best advice is to run the numbers and see for yourself. All of the consumer tax programs have planning modules that should let you run what-if scenarios using the 2012 tax rules as of the date the software was released.

Ira Smilovitz

frighteningly large marginal tax rate. I recharacterized most of my conversions each year.

would skip my conversion this year since AMT is inevitable. But then I realized I will lose my deductions to AMT whether I convert my IRA or not; so I might as well convert it.

advice, but does my proposal at least make sense (if I have already lost my deductions to AMT, a conversion can't do more damage)?

consumer tax programs have planning modules that should let you run what-if scenarios using the 2012 tax rules as of the date the software was released.

I am not sure how to do that, but I put a large capital gain into my 2011 return and tried various numbers.

Seems to work reasonably well. My marginal rate (Fed & NY) is 40%. That is dreadful, but confirms the concept as it is at least normal. Now I have to decide if I want to mess with it for the next 10 years, or bite the bullet and do it this year and get it over with. (my phantom marginal rate last year was 60%, so I had to recharacterize 70% of it to get it down)

would skip my conversion this year since AMT is inevitable. But then I realized I will lose my deductions to AMT whether I convert my IRA or not; so I might as well convert it.

Why the big rush to convert?

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Some deductions are allowed under AMT, such as mortgage interest, charitable contributions, gambling, estate, part of medical. Some of those not allowed: state tax, SDI tax, property tax, misc deductions subject to 2%.