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Outlawing Recharacterizations


OxLobber

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I have seen scant mention of plans within the Republican tax bills to discontinue recharacterizations of Roth IRA conversions.

I have made liberal use of these in recent years to lower impending RMD while controlling my taxable income to levels below undesirable breakpoints.

Do they really expect to increase revenue significantly by making this change?

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3 hours ago, OxLobber said:

I have made liberal use of these in recent years to lower impending RMD while controlling my taxable income to levels below undesirable breakpoints.

Do they really expect to increase revenue significantly by making this change?

I think your first paragraph answers your second; perhaps with the word "significantly" deleted, but somebody assigned a value (revenue) to that concept and it got put into a spreadsheet and was used to justify other cuts.

Ed Snyder

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Be careful when trying to attach logic to the legislative process.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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"Significant revenue" is definitely in the eye of the beholder.  The elimination of recharacterization is expected to generate $500 million over 10 years.  Not much in Washington terms.  As for me, I wouldn't say no.

 - There are two types of people in the world: those who can extrapolate from incomplete data sets...

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