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The real benefit of conversions comes if you use money outside the IRA to pay the taxes.
Can one avoid using outside money to pay the taxes on conversion without paying a penalty for early withdrawal? Or, to put it in a less convoluted form, won't the taxpayer be subject to a penalty if he or she uses money from the IRA to pay the taxes on conversion?

almostt certain the penalty is IF (and only if) you're under 59.5 yrs

what they're saying is you get no benefit from a conversion if you can't pay the taxes (which occur regardless of age) 'from' the conversion.


you want to convert 10,000. which incurs ,say, 3,000 of tax.

IF you can move all 10k to the Roth and pay the 3K from other funds, there MIGHT be an advantage.
but if you move only 7K (to Roth) and use the other 3K for taxes, you LOSE out in the end

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