follow form 8606 to determine the taxable portion.
Taxable Income On A Complete Roth Conversion
You need to figure the taxable income that you create when you convert your traditional IRA to a Roth IRA. This task is simple if you convert the entire traditional IRA -- the taxable income is equal to the total conversion amount minus the basis. For example, if your traditional IRA balance is $100,000 of which $13,000 represents non-deductible contributions, you create $87,000 in ordinary taxable income through the Roth IRA conversion. Of course, your actual tax bill for the year depends on your total income, deductions and credits. Traditional IRAs require minimum distributions once you attain age 70½. You cannot convert any required minimum distributions for the tax year.
Taxable Income On A Partial Roth Conversion
Although you can convert only part of your traditional IRA to a Roth IRA, you cannot specify a partial rollover of only your non-deductible contributions. Rather, the IRS requires you to prorate your non-deductible contributions as a percentage of your total traditional IRA money on Form 8606.
