DEFRAYING TAXES ON CONVERSION OF TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNT TO A ROTH INDIVIDUAL RETIREMENT ACCOUNT

摘要

A method for defraying taxes on conversion of a traditional IRA to a Roth IRA is disclosed. The method includes selling the holdings of the traditional IRA, purchasing a bonus annuity with proceeds of the sale of the holdings, designating the bonus annuity as a Roth IRA, waiting for a period of time, withdrawing from the bonus annuity a first amount slated for paying taxes on the conversion, waiting for a period of time, withdrawing from the bonus annuity a second amount, paying at least a portion of taxes on the conversion with the first and second amounts, waiting for a period of time, withdrawing from the bonus annuity a third amount, and paying substantially a remainder of the taxes on the conversion with a remaining portion of the first, second and third amounts, wherein a sum of the first, second and third amounts equal the taxes on the conversion.