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Hello Fellow Fools,

In October 2000 I opened, and made a $2000 deductible contribution to a traditional IRA. In January of last year, I made another $2000 contribution, which I now see will be non-deductible as a result of the 403(b) plan which my employer since August offers - so I am evaluating conversion to a Roth IRA.

As a result of some unFOOLish investments decisions, and the downturn in the market the IRA is now only worth $2873.81.

If I converted, what would be the tax liability? $873.81? ($2873.81 - the $2000 nondeductible contribution?) $2000? (The full value of the deductible contribution?) Would it be the current market value of the 2000 contribution?

(Whether this is relevant would depend on the answer to question 1.)
Could I file an amended 2000 tax return and NOT take credit for the $2000 deduction? (Essentially unscrambling the egg of the deductible IRA contribution.)

Is the tax liability of a conversion completely dependent on calendar year, or could I convert today, and have the penalty occur in my 2001 taxes?

Thanks for the help!

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