Take all my unrealized capital gains this year?

Is most of your investment income short term capital gains? Long term capital gains are not subject to AMT, although they lower your AMT exemption and thus expose more of your regular income to AMT. So a good strategy is to hold stocks for over one year.

You might be in AMT if you made payments not allowed under AMT, such as property tax payments, estimated state income tax payments. If you can defer these payments, noting that there will be penalties for paying for property and state income taxes late (and you risk the state taking possession of your home if you are late with property taxes), this might avoid AMT. But then pay the tax next year. But this only makes sense if next year your income is less such that you are not in AMT, but no so much less that the deduction is meaningless.

You can't take an unrealized capital gain, unless you have some marked-to-market election in effect. You have to realize it, take the profit, pay tax, and then buy back the shares if you want to. Wash sale rule does not apply as you are selling at a profit.

It would be best to do the conversion in a bad year where you typically pay no tax.

Yes.

opportune to do it all at once and avoid multiple AMTs.

Yes. Do it. But. I suggest you convert to as many Roth accounts as you have patience to fill out paperwork for. Convert by asset type or even individual stock. This will give you the option to recharacterize in hindsight which of course is 20/20. You start by recharacterizing stuff that went down in value. Then see where you fall bracket-wise. You see, even if you're in AMT land and paying 40% (or whatever phantom rate kicks in) you may have Roth accounts that were up 100% over that time, and worth leaving converted. So long as you are willing to pay attention, convert and recharacterize, there's little risk in converting now.

Most of the deductions are for medical and investment management fees; some real estate tax.

I phrased that poorly. I meant to say I could realize the gain.

I owed no tax the last two years until I converted the IRA and paid an absurd tax rate because of AMT. I had to recharacterize most of the conversion.

I know I will be paying 40% on the conversion, but that is better than the 60% I would have paid last year if I didn't recharacterize.

considerable deductions.

up all my capital loss carryforward last year, and have considerable realized capital gains.

unrealized capital gains this year. I can't lose my deductions more than once, and doing this will reduce the likelihood of it happening again in future years.

opportune to do it all at once and avoid multiple AMTs.

just to minimize your taxes?

considerable deductions.

up all my capital loss carryforward last year, and have considerable realized capital gains.

unrealized capital gains this year. I can't lose my deductions more than once, and doing this will reduce the likelihood of it happening again in future years.

opportune to do it all at once and avoid multiple AMTs.

I added 5 levels of capital gains from $0 to $400,000 and 5 levels of recharacterization from 0% to 100% to my 2011 tax return to see what would happen; 25 different scenarios. The results were surprising.

50% recharacterization seemed optimal; any more gave a horrible tax rate. The amount of long term capital gains didn't matter; it was all taxed at 30% Federal and NY. Since 30% is high and didn't help the IRA at all, it seems prudent to minimize the capital gains.

Too bad, I wanted to get this IRA stuff over with, but it is just too expensive to do it all this year.

It is not what I expected. Maybe I will go back and see how taxes and AMT move around; but it probably doesn't matter much.

To quantify that, $100 of LTCG will lower your AMT exemption by $25, exposing an additional $25 of other income to the AMT.

So you'll pay $15 tax on the LTCG and will pay 28% on that $25 ($7) for a total of $22 tax.

So while you're in the AMT exemption phaseout range, the actual rate on LTCG is 22%, not 15%. Once the exemption is fully phased out, the rate will drop back to 15%.