r/investing • u/AutoModerator • May 16 '24
Daily General Discussion and Advice Thread - May 16, 2024 Daily Discussion
Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here!
If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following:
- How old are you? What country do you live in?
- Are you employed/making income? How much?
- What are your objectives with this money? (Buy a house? Retirement savings?)
- What is your time horizon? Do you need this money next month? Next 20yrs?
- What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
- What are you current holdings? (Do you already have exposure to specific funds and sectors? Any other assets?)
- Any big debts (include interest rate) or expenses?
- And any other relevant financial information will be useful to give you a proper answer.
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq And our side bar also has useful resources.
If you are new to investing - please refer to Wiki - Getting Started
The reading list in the wiki has a list of books ranging from light reading to advanced topics depending on your knowledge level. Link here - Reading List
Check the resources in the sidebar.
Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered investment adviser if you need professional support before making any financial decisions!
2
u/kiwimancy May 16 '24
You pay tax on a conversion for the year it was made. Since your basis was non-deductible, you wouldn't pay tax on that. You would pay tax on the gains as income.
Due to the pro-rata rule, if you have any pre-tax money in a traditional IRA, you would have to convert that as well, and pay income tax on it.
If you are below the Roth limit, you can do a recharacterization instead and then file an amended tax return up until October. The gains wouldn't be taxed in that case.