Toward the end of 2021 it became apparent that we would have a business loss that would result in negative taxable income. I did a ROTH conversion for the approximate amount so as to bring income and taxation to close to zero $. I had a non-deductible basis in my traditional IRA of about slightly more than half the amount I converted. I fully intended the full amount of the conversion to be taxable.
I just noticed that the only amount included in my taxable income was the amount of the conversion less the amount of my basis.
My question is whether one is required to expend the basis or if it is OK to not use the basis and, in effect, to increase the tax ability of the converted funds. I know there are pro-rata rules that limit the amount of basis that can be claimed but this seems to be the opposite situation.
Thanks for your help.
