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URL:  http://boards.fool.com/gtthanks-for-your-help-one-more-thing-im-10153823.aspx

Subject:  Re: Roth conversion questions Date:  4/14/1998  9:23 PM
Author:  LasVegasFool Number:  2830 of 75824

>Thanks for your help. One more thing: I'm trying to >figure out the logic behind making someone pay
> taxes on the converted amount that is income to the >traditional IRA (as opposed to the
> contributions made to it). Since income grows tax >free in both a traditional IRA and a Roth IRA,
> why should one have to pay tax on this income during >a conversion? This sounds like a penalty to
> me. What am I missing?

Traditional IRA's are generally deductible, Roth's aren't. In the long run, deductible contributions and taxed income comes out the same as taxable contributions and nontaxed income, *IF* you put in the same true amount. (However, with Roth, you get to put in more true $.)
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