Roth IRAs

More on Roth IRA Conversions – The Consequences and How to Avoid The Taxes

You will have to go to check out this article – a little too long for a blog post.

Here is the link:

My summary:  the out of pocket cost for someone in the relatively low 25% federal income tax bracket to convert a $100,000 IRA to a Roth is about $42,000! Someone starting in the 28% bracket and higher, the cost jumps to around $50,000!!!!!

Read the article and challenge my math!  The numbers are relatively simple to figure out.

This is, of course, without any charitable planning to offset the extra tax.

Stay tuned for Part III on Roth Conversions:  The Roth Conversion Super-Duper Defective Grantor Lead Trust that solves all of your tax worries for a hundred years or more (or not).

New Roth IRAs Rules and Charitable Giving – Opportunities?

check out this article on Roth IRAs and charitable giving:

Ok, I wrote it yesterday and they posted it right away.  The more I think about the 2010 Roth IRA conversion rule changes, the more I think philanthropic planners need to get themselves prepared to discuss options with donors facing big tax bills for their conversions.

As the Planned Giving World Turns – Roth IRAs and Bankruptcy Protection

I can’t believe it has been almost a month since my last post!  It’s been the busy season for me!

Anyway, I have 2 updates for readers.

1. My previous post in March had to do with my amazing discovery (at least to me)  about how bankruptcy courts generally protect endowments and other restricted gifts from creditors!  To back up this claim, I finally got around to reading my emails and there was an article from a top law firm discussing this very topic on  Here is the link:

2. Roth IRA rules.  Check out on the web the HUGE change in the 2010 IRA Roth conversion rules.  In short, 2009 and prior, wealthy individuals and higher net earners ($100,000 AGI and up) were essentially locked out of the Roth IRA world.  Comes 2010, and all of those who actually have assets can now convert their entire IRAs into Roths!  And, not even pay the income tax in 2010 (can be spread out 50/50 in 2011 and 2012).  And, they can retroactively back out of it before ever paying taxes if the investments tank!

Why should fundraisers know about or care about Roth IRAs (in fact, they are the last asset that should be designated to charity!)?

Well, if you find out that your major campaign supporter is going to take advantage of the new law and get socked with huge tax hits in 2011 and 2012, why not work with the donor on accelerating his pledge?  Just one example.

More to come about Roths.