Recent Developments

■ Roth Tax Tip:  A common conversion approach is to divide your IRA into separate IRAs converting each with investments in different asset classes. The ones that don’t appreciate you re-convert to regular IRAs so you don’t have to pay income tax on a unfavorable investment result.  Everyone in your foursome converted their IRA to a Roth so you jump on the bandwagon. Check out your State estimated tax payments. If you don't pay in enough your extension may not be valid. This can be tricky. If you made estimates assuming some IRAs would be reconverted from Roth to regular IRAs, you could void your state extension. Pay estimated state tax as if reconversion isn't an option

■ Roth Drafting Tip:   If you have a large Roth conversion consider amending your durable power of attorney and will to authorize your fiduciaries (agent, executor) to reconvert a Roth back to a regular IRA, or to convert a regular IRA to a Roth. Caution – if the beneficiaries of the IRA (regular or Roth conversion) are different then those receiving gifts under your power, or bequests under your will, clarify how this should be addressed.