It is not 50%, that is just my example. It simply pro-rates the basis between the distribution and the remaining IRA value. It is not a Roth replacement.
After Roth IRA's can into existence there is very little reason to intentionally put after-tax money into a Traditionally IRA as an investment, unless are doing so to get the money into a Roth as a "Backdoor Roth", but that ONLY works if the total year end value of ALL Traditional IRA accounts is zero.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
