Does Roth Conversion Limit Scedule A Deductions?

[Guest MAJT2]

Adding my Roth conversion to AGI, the total exceeds the break point of $124,500 for Schedule A deductions. Turbotax says I cannot file a Schedule A, but instead must take the standard deduction of $4250 for a single person, thus losing out on the far better option of deducting home mortgage interest, real estate taxes, charitable contributions, etc. Should the Roth conversion that is allocated to AGI, limit the amount of itemized deductions on Schedule A?

[Guest Mary Ann]

Itemized deductions are reduced by 3% of the amount of AGI exceeding 124,500. So, when you reduce your itemized deductions by this amount, if the remaining itemized deductions are less than the standard deduction, then of course you would deduct the standard deduction of 4,250..

The Roth conversion is part of AGI and therefore has an affect on the itemized deduction amount. Of course, only the taxable portion of the conversion for 1998 is included in AGI.