Because the primary driver for whether to convert or not is the current marginal tax rate vs. the expected future marginal tax rate. There is no problem saying that one can convert twice as many shares at the same marginal tax rate if the market has dropped 50%.Yes, I paid 24% on the half-priced shares being converted (as I originally said). I ended up with the same result as if I had converted and paid 12% taxes when the shares were full price.
Is this ok with you now, FiveK? I don't understand why you are disagreeing with me here.
If converting before the market drop at that tax rate was a good idea, the market drop makes it a better idea. But if you wouldn't convert at that marginal rate before the market drop, then you shouldn't convert at that marginal rate if the market does drop. Do you agree?
Just trying to keep this as apples vs. apples. Don't know offhand of a more valid way to do so, but if you'd like to propose a different example that could be interesting.And your last example isn't valid in # 2.
You are no longer using "fresh" cash to pay the taxes but money that was invested (and apparently was invested like the shares that were to be converted). Instead, you should be paying the tax as if it was withholding.
Statistics: Posted by FiveK — Sat Nov 23, 2024 4:20 am — Replies 23 — Views 1590