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A note on Roth conversions

by on May 27, 2014

Featured in a recent Slott Report on Roth IRAs posted May 16th were some of the top Roth conversion mistakes common today. These are mistakes advisors work to help clients avoid – ones that can sometimes be overlooked or just misunderstood. One to be aware of: the incorrect valuation of assets when doing a Roth conversion. As Beverly DeVeny and Jared Trexler noted, “Many tax scams are based on undervaluing assets. This is also true when it comes to Roth IRA conversions. A fair market value must be used for the asset converted. A common example is an annuity contract with riders. Such riders can increase the fair market value of the annuity contract, increasing the tax you will owe if you do a Roth conversion of the IRA annuity.” When considering a Roth conversion, be sure you are working with a professional that can help you avoid this or other common mistakes.

From → 2014

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