You can only roll the 401k over into a traditional IRA. You can then convert all or part of that money into a Roth. I would strongly recommend that you pay the taxes on the converted amount out of pocket, and not out of the funds in the account. If you can't afford to convert all of it from traditional to Roth, then figure out how much you can afford to pay taxes on now and convert just that amount this year. Next year (or whenever) you can convert more. Or if you can't afford to pay any taxes on it right now, then just leave it in the traditional IRA until you can afford it. Just my .02.
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