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My fiance switched to a Roth IRA in December. The end of year value of her account was approximately $12K. While I know that she is responsible for paying taxes on this money (spread across four years), it seems to me that she is getting taxed TWICE on the $2K she contributed in 1998.

The $2K is taxable income from her job that she put into the IRA (increasing her IRA account by $2K). By switching to the Roth, she now has to pay taxes on the $2K that is already reflected in her taxable income.

Am I totally off base here?
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