I'm considering converting some of my Traditional IRA into a Roth, and I think I may be able to do it tax free.Here's the pitch:Mrs. Goofy and I have been retired for the full year. Our only income is my social security and a paltry few dollars in interest on bank accounts. We have some stocks in regular accounts with appreciation, but if we don't sell, no tax is due. Most of our income is invisible to the tax man, being in high dividend stocks in 401(k)s. We have a rental property which will be cash-flow neutral for the year, having been unoccupied for 5 months while I did renovations.Therefore, our total "income" for the year (applicable to taxation) will probably be $20,000 or so. For the sake of argument, and to make the numbers easy, suppose I have $1,000,000 in a traditional IRA. Since the tax tables allow up to $68,000 in income tax free, could I not convert some portion of my IRA to a Roth, pay the taxes - except oops, no taxes are due, so long as the conversion doesn't create another $48,000 in taxes?If that is true, how do I account for the non-deductible portion (basis) which is in the traditional IRA. Again, for the sake of easy numbers, suppose $100,000 is "basis." Does that come out tax free? Does it come out first? Does it come out proportionally with other withdrawals?I am shopping for a new tax guy, because my regular guy suddenly and without notice retired and is unavailable. Damn nuisance. (Second time it's happened in four years.) But any advice will help me put things in some sort of order, assuming I can find a new one in the next few weeks.
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