Shortcut Navigation:

Question for the Money Doctors

Question submitted on Mar 4, 2021.

Question

i retired in 2000 and collected social security , rental income and RMD since then.

now I am selling rental house. my expense is gone down. Thinking those option, I would like to convert IRA money into ROTH IRA. .

Now my question to is " can I pay IRS Taxes out of my taxable account, not from IRA money?"

Answer

Hi. Yes, you can pay taxes on the conversion out of your rental house sale proceeds.  In fact, paying the taxes outside of the IRA is generally the preferred strategy in order to maximize the tax free growth of the converted amount. I would recommend engaging a CPA/PFS in your area to assist you with determining the optimal timing and strategy for the conversion.


For additional information visit //www.360financialliteracy.org/

close