I will try to put the most relevant factsinto a few short sentences so as not to confuse you or myself; I am not an expert on IRS terminology. Here goes.

My income in 98 was over $30,000.
I contributed around 1,800 to the trad IRA in 98.
I HAVE (ie in past years) deducted in full all IRA contributions before this year. Thus, no basis. Right?
I converted the trad IRA to the Roth in late 98 and made no other investments in either IRA.

Problem 1: Are the investments for 98 considered deductible or non? The IRS has said one thing and people on here have said another.

Problem 2: If they are non, then how can I fill out Part I of 8606 when it refers me the the IRA Deduction Worksheet in the 1040 book? BTW, this form required your modified adjusted gross income to proceed. And where does this come from? 8606 Part II of course. And then you need to complete Part I first, which refers me to the IRA Deduction.......

Solution 1?: The worksheet in Publication 590 to evade this annoying loop?

In the end, I do not completely understand the meaning of non-deductible contributions. I thought I did once, but after talking with the IRS, reading their Pubs, and reading this board, I am more confused than ever.

If anyone requires any other pertinent info, I would be glad to supply it in hopes I get a straight answer from two sources.

Sorry TaxDude. I've been filing my own taxes for about 5 years now and this is the strangest thing I have hit yet, beating out excess contributions to an IRA and Capital Gain by far.