IRA vs Roth: rollover or not?

[George Walls]

Given this year's Roth conversion rules, and next year's higher taxes, has anyone done the math to figure out if it makes sense to do a Roth rollover rather than buy in an IRA?

For simplicity assume enough cash on the side to pay the rollover and two options are are: buy a 4 plex in an IRA and a house with after tax cash -- or buy a 4-plex in a Roth and use the after tax cash to pay the taxes on the rollover.

[Jon Holdman]

Every time I've done the calculations, owing real estate in an IRA doesn't make sense. If its all cash, you avoid UBIT, but you get the low returns associated with all cash real estate. If you get a loan, you pay UBIT. Either way, it ends up being not a very attractive investment.

Personally I think there's a lot to be said for doing the Roth conversion. I just don't see tax rates staying this low long term. So pay today's rates and be done with it.

However, this is a complex question. I strongly recommend you set with your CPA and go through the calculations. If you have enough cash in an IRA and in your bank account to be asking the question, some money spent with a good CPA will be money well spent.