Transferring to Roth

[Julian Buick]

I've been using my SDIRA for private lending for a couple of years now with pretty good success. I was recently given an end date for my current job (I'm a contract engineer so it happens). This has got me thinking about the best ways for transferring my conventional SDIRA to a Roth. I plan to get together with my tax advisor in the next few weeks but I want to come armed with some suggestions. I realize that if I take a full year out of work and rollover during that year then the taxes would be less but what is the optimal strategy. If I rollover say 350k in one year I still pay a boat load of tax. If I rollover 100k then maybe not so much but then I have to stay not earning any income for more years to come so I can rollover some more. Is buying rentals to take the depreciation a good way to do it? Or is that only going to make a smell dent in the tax bill as well? Just looking for suggestions. Any and all are welcome. 

[Mark Nolan]

@Julian Buick

The good thing about Roth conversions is that you can convert all in one year or a little each year. As a result and from a tax planning perspective, individuals will process partial Rothconversions each year and higher amounts in years that they don't have high earned income earnings because the amount converted from the IRA to the Roth IRA is included in your taxable income for the year of Roth conversion. The following link covers the Roth IRA conversion rules.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-rollovers-and-roth-conversions