Gift Planning Analysis Tool

Roth Conversion + Charitable Offset Calculator

Analyze whether a Roth conversion makes sense — with two distinct objectives: reducing your own future RMDs, or reducing the tax burden on a child heir under SECURE 2.0's 10-year forced distribution rule. Pair either scenario with a charitable offset strategy to see how a DAF contribution or QCD changes the breakeven analysis.

ℹ️ RMD Reduction Mode: The breakeven analysis compares paying tax now at your current rate versus paying at your own projected future rate on forced distributions starting at age 73. The question is whether your retirement marginal rate will exceed your conversion rate — and by enough to justify the upfront cost. 
Conversion Parameters
IRA Segmentation

Conversion only makes sense for the portion going to heirs. The charity-destined share should stay in the traditional IRA — charities pay no income tax and receive full value.

Total IRA Balance
$
Portion Intended for Charity0%
$
 
 
Heir share: $1,000,000 Charity share: $500,000
Only the heir share ($1,000,000) should be considered for conversion. The charity share stays in the traditional IRA — it will pass tax-free to your institution at death.
Conversion Amount
$
Other AGI (non-conversion income)SS, dividends, pension
$
Owner's Current Age

Current Federal Marginal Rate

State Income Tax Rate
%
Expected Annual Return
%

Pay conversion tax from outside assets?

 
Optimal approach: paying tax from outside assets means the full converted amount enters the Roth and compounds tax-free immediately.
Owner's Future Distribution Rate
Projected Retirement Tax Ratecombined fed + state
%
This should reflect the blended rate you expect when RMDs stack on top of Social Security (85% taxable), investment income, and any pension. For large IRA balances, this often runs 30–38% even for owners who feel "middle income" in retirement.
Time Horizonyears until distribution
yrs
Charitable Offset Strategy
 
Giving Mechanism

Charitable Gift Amount (FMV) max deductible: 30% AGI
$
Cost Basis of Donated Securities
$
LTCG Rate (including NIIT if applicable)

Donating appreciated securities creates a dual tax benefit: an income deduction against the conversion income, plus permanent LTCG avoidance on the embedded gain. Unrealized gain: $60,000.
Quick Summary
Standard Tax Cost
—
at — effective rate
Net Tax After Offset
—
—
Tax Savings from Gift
—
—
Rate Reduction
—
drop in effective rate

 

Scenario A — No Charitable Offset
Tax Cost
—
Effective Rate
—
Breakeven Future Rate
—
must exceed to justify conversion
Decision Signal
—
vs. projected future rate
 
Scenario B — With Charitable Offset
Net Tax Cost
—
Effective Rate
—
Breakeven Future Rate
—
lowered threshold
Decision Signal
—
vs. projected future rate
 

 

 

Tax Component Breakdown
ComponentNo Offset (A)With Charitable (B)Δ Savings
Conversion amount———
Gross tax on conversion (fed + state)———
Income tax deduction from gift———
LTCG tax avoided on donated securities———
Net effective tax cost———
Effective rate on conversion———
Breakeven future rate———

 

Estate & Beneficiary Note: If any portion of this IRA is intended for charitable bequests, converting that share is suboptimal — charities pay no income tax on traditional IRA distributions. The highest-efficiency structure is: leave the traditional IRA to charity → leave Roth and non-IRA assets to heirs.

This calculator is for illustrative purposes only and does not constitute tax or legal advice. IRMAA Medicare surcharges, the OBBBA 0.5% AGI floor and 2/37 limitation at the top bracket, Social Security inclusion thresholds, state-specific rules, and estate tax implications are not fully modeled. Heir rate estimates are approximations based on marginal bracket stacking and do not account for heir income growth, filing status changes, or itemized deductions. Consult a qualified tax advisor. Charitable gifts to a DAF are irrevocable.

After-Tax Value Over Time
Comparing three paths over the selected time horizon

Both Roth lines reflect tax-free growth from conversion. "Roth (with charitable)" starts from a lower effective tax cost.

Key Metrics Summary
Effective Rate — No Offset
—
standard conversion cost
Effective Rate — With Charitable
—
after offset
Breakeven Future Rate — No Offset
—
threshold to justify conversion
Breakeven Future Rate — With Charitable
—
lowered threshold