That's because the amount of money that's converted is subject to ordinary income tax – which can be as high as 37%.
Even for those who are taxed at a lower rate, a sufficiently large conversion might bump them into a higher tax bracket.
Long-term capital gains taxes have three tiers, depending on an investor's income: 0%, 15% and 20%.
In a higher tax environment, "tax loss harvesting will become more important, and doing it in a performance-neutral way," said Jerrod Pearce, a certified financial planner and partner at Creative Planning in Overland Park, Kansas.
Don't sell highly appreciated assets to generate cash if you're donating to charity.
Persons:
Warren Buffett, Berkshire Hathaway, Buffett, Trump, Tim Steffen, Baird, Roth, Steffen, that's, Jerrod Pearce
Organizations:
Creative Planning, Mutual
Locations:
Berkshire, Washington, Overland Park , Kansas