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I'm not sure if this board is the appropriate venue for this question, but if not, perhaps someone can point me to the right place.

First, I have read the FAQ and looked at the conversion caluculator page--it was not particularly helpful.

What I am looking at is the possibility of converting a Rollover IRA into a Rollover Roth IRA. I understand that there will be some tax consequences and that I will probably have to deal with sales commissions.

My IRA is currently invested in stock--quite a bit of it in the tech stocks that have been heavily hit this past month. Most of the current holdings are actually short term holdings--most purchased in Dec. or Jan. of this year. Some of my stocks have appreciated so I probably should hold back on moving them at this point. However, I have taken a major hit in stocks like MSFT. I would like to know if and how the current drop in price would affect the tax bite of doing a conversion.

Here are the major questions I have:

1. I am assuming that I will have to sell the current holdings and repurchase in the new ROTH account. Can I treat this as capital gains losses, or would I have to simply show the whole amount remaining as taxable income?
2. Would the fact that these stocks are short term holdings be a major impediment?

I know I will have to make a decision as to how to cover the taxes. As I would prefer to pay them up front without touching the rollover amount, it is essential that I understand how these issues will affect the amount I will have to cover.

Oh, yes, I expect my age may make some difference as well. I will be 59 next month. Barring the unforeseen, I do not expect to retire before at least 65, and may continue working until 70, as I enjoy what I do.

Any insights from fellow Fools would help.


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