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I did exactly the same thing last year for two 401ks. You could pay the taxes for the Roth conversion, out of the IRA money, but I wouldn't do the conversion if I had to do it that way because of two things.

1. You will pay a 10% early withdrawal penalty on the money you pull out for taxes.

2. Probably most important, depending on your investment horizen, you take away dollars from your IRA which, after conversion, will grow not only tax deferred but tax free!

If at all possible, get the money together from non-qualified sources to pay the taxes and preserve the benefit of the IRA.

Tyler
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