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I'm in the process of converting a regular IRA to a Roth IRA, and have stumbled on the following confusing problem, which I thought someone here might be able to help me unravel.

I've only had the IRA open for a year and a little bit, and have managed to actually lose money in it during that time period (another problem altogether). Now, I know that if I converted an IRA that was in the black, I would have to pay the capital gains and an early withdrawal penalty. The question is, if I convert an IRA that is currently underwater, do I get any tax benefit?

John Girard
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