I am currently "tax free" due to being stationed in Kosovo.

[Guest John Delage]

I am in the Army currently serving a peacekeeping mission in Kosovo. This means I receive pay without taxes. My question is a longshot, but I'll try it anyway. I have approximately $10,000 I want to convert from a traditional to a Roth IRA. Does my situation exempt me from the taxes involved in the transaction?

[BPickerCPA]

Your pay is without taxes, but you would be taxed on your other income, I would surmise. So if you converted $10,000 to a Roth, you would add the $10,000 to whatever other TAXABLE income you have, and however that computes is what you'll pay in taxes.

[Guest John Delage]

Oh well, thanks for the information though... I appreciate it.

[John G]

You did not like Barry's answer? Sounds like you would qualify for a Roth conversion and be able to convert at a very low tax rate. You also could do a partial conversion if you wanted to stay below a particular tax bracket. Then, if your circumstances were the same next year, convert another amount.

You did not provide any numbers, but it sounds like you have just about the best possible conversion scenario. At 15%, you might be able to convert the entire Roth for $1,500.

Only elect to convert if you can pay the taxes using money outside of your IRA.