Regarding the 1099-R you received which reflects the $60,000 amount you rolled over into a Roth IRA as taxable income, did you have a basis in your traditional IRA? The basis in your traditional IRA would be the amount of contributions you made to such account that were non-deductible. The non-deductible contributions would be reflected on Form 8606, Non-Deductible IRAs.
Your traditional IRA basis is important because you would not have to pay tax on that money. Thus, you would subtract your basis from the $60,000 amount to arrive at the taxable amount. If you have no basis in your traditional IRA because you deducted your IRA contributions on your return(s), then the amount you rolled over into the Roth IRA would be taxable income.
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