Hi everyone, hoping to get some advice before I sit down and do some heavy calculations only to find out I missed a key concept.
Merry Christmas and Happy New Year (in Advance). It's the year of the Rooster coming and for us Monkeys (1956,1968,1980) that means another good year overall, filled with our usual complex navigation of ups and downs. Anyhow, here's the situation, I look forward to reading the collective wisdom of this forum.
Life Situation: Married filing jointly, one child age 10. Age 48, semi-retired, living in China. Own a business in China that pays taxes in China and qualify for US tax exemption as we are non-residents of the USA. Currently also exempted from obligatory health care/health care penalty.
Gross Salary/Wages: Zero W-2 or other income, except for taxable gains and dividends.
Pre-tax deductions: None.
Other Ordinary Income: 0
Qualified Dividends: 15,000 & Long Term Capital Gains:10,000 401K Dividends: ~ 12,000.
Rental Income, Actual Expenses, and Depreciation: Rental income but with depreciation, the net comes out as a 13,000 loss. (probably another issue that I should raise rent, but renters are good and take good care of the place).
Adjusted Gross Income: 25,000
Taxes: 0
Current expenses: None, all paid in China through China business.
Assets: Taxable Investments: 650K including current Unrealized Long Term Gains: 230K
Cash: 250K (from recent house sale and 2016 re-balancing)
IRA Accounts: 800K
Roth Accounts: 21K
Rental Home: Market Value 450K; 200K Equity
Liabilities: Mortgage 250K at 3.5% ARM
Specific Question(s): Given a current plan for my family and I to stay in China for the next 5 years, what’s the tradeoff between:
a) starting a Roth Conversion Ladder now to move IRA money into Roth Accounts
or
b) cashing out Taxable Unrealized Long Term Gains to avoid paying capital gains tax?
Finally: Do I need a Monte Carlo model or should I just go to Denny’s and have a Monte Cristo (The quick and easy sandwich with ham, turkey and Swiss slices, dipped in an egg/milk mixture and fried to a golden brown)?