# Roth Conversion During Market Drop

> Moving depressed shares into Roth avoids taxes on rebound.
- Title: Roth Conversion During Market Drop · 24/7 Wall St. | Shortify
- Summary: Moving depressed shares into Roth avoids taxes on rebound. A buried IRS rule lets investors move shares from a traditional IRA into a Roth IRA at depressed…
- Keywords: roth conversion, traditional ira, market drawdown, tax discount, irs rule, in kind conversion, rebound compounding, Roth, Conversion, During, Market, Drop
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/09/22/when-his-fund-dropped-in-the-spring-he-moved-the-shares-into-the-roth-instead-of-selling-them-the-irs-taxed-the-depressed-price-and-the-rebound-happened-where-it-cant-be-taxed
- Author: David Beren
- Published: 2026-09-22T17:14:36+00:00
- Read time: 1 min
- Topics: roth conversion, traditional ira, market drawdown, tax discount, irs rule, in kind conversion, rebound compounding
## Buried IRS Rule for Tax Discount
A buried IRS rule lets you move depressed shares into a Roth without selling, locking in a lower tax bill before the rebound arrives.

> A Roth conversion is not a sale
## Tax Advantage During Drawdown
You move identical shares from the traditional IRA into a Roth IRA without selling. The IRS taxes the transfer at the shares’ value on the transfer date.
## Why In Kind Conversions Are Rare
In-kind conversions keep you continuously invested during market swings, avoiding the risk of missing a snap-back rally when selling.
## Irreversible Mistake After 2018
The Tax Cuts and Jobs Act eliminated recharacterization of Roth conversions for tax years beginning after December 31, 2017, making the conversion irreversible.
## Who Benefits From This Strategy
Holders of pre-tax traditional IRAs with cash outside the IRA to pay tax and who can leave converted balances untouched for five years benefit most.
## How to Run the Strategy
Decide the dollar amount to convert based on tax you can pay from outside cash, split into portions, and request in-kind transfers with zero withholding.
## Critical Question Before Converting
Can you pay the tax from money outside the IRA? If yes, the strategy taxes the depressed price while the rebound compounds tax-free.
## Key takeaway

A buried IRS rule lets investors move shares from a traditional IRA into a Roth IRA at depressed prices, taxing the lower value while the rebound compounds tax-free.