This is my first full FIREd year. I am planning to do a traditional to Roth IRA conversion to keep me in the 12% tax bracket and fully utilize the space in the 12% tax bracket.
I figure I can try to hit a taxable income of around $50,700 to use up the 12% tax bracket ($12,000 standard deduction + $38700 of 12% taxable bracket).
I have about $7000 of earned income from last year's employment bonus paid out in 2018. So that leaves me with $43,700 to convert from my traditional to Roth IRA.
Now, I realize that in my younger and not-so-wise days, I was not index investing and held some stock that now has a capital loss. Can I take that capital loss now and use that to convert even more into my Roth IRA?
For example, if I have $10,000 of capital loss from selling this stock, does that get directly deducted from my income, thereby giving me $53,700 available to convert to the Roth IRA?
I know I can only carry over $3,000 capital loss year to year, but I am not sure if I can take the $10,000 loss all in one year with no capital gains to offset the loss.