Hello everyone, quick question, I want to make sure I understand this.
So say it comes time to do a Roth conversion Ladder and I have 5 years of expenses in a taxable account.
Do the capital gains count towards my yearly income?
So, say the top of the 12% (formerly 15%) tax bracket is 40,000 for the year.
Can I sell shares up to $40,000 per year in my taxable account to live on while creating the conversion ladder without having to pay tax on the gains and at the same time convert $40,000 from the Traditional IRA to the Roth and still remain in the 12% tax bracket?
Or will the capital gains count towards income and mean I would have to do the math to figure out how much I can move from the Traditional IRA to the Roth to remain in the 12% bracket?
Also, if my taxable account draws Dividends, will I need to deduct those from my ladder conversion as well?
Thank you!