Craig Wear, CFP, explains why you shouldn't use IRA funds to pay taxes on a Roth conversion. Use after-tax brokerage accounts instead, even if it triggers capital gains, because spending IRA money for taxes defeats the point of converting.
And the about the balance that you have to convert becomes bigger and it's just not worth waiting. Another mistake is a lot of people use IRA funds to pay conversion taxes when they also have other brokerage accounts that are after tax. These strategies work just great if all you have are IRA money to pay the taxes with. But when you have those other accounts that are outside of your ira, a lot of people hold onto those almost as though they're so valuable that they can never spend them and never use them. And I get that. But when you're doing Roth conversions, the best money you can actually use are those after tax accounts, even if they have a capital gain that you have to pay.
