Here is how I understand it if you want to rollover non-deductible traditional IRA contributions into a Roth account for high-income earners. This works fine without penalties if you do not own any IRA accounts with deductible contributions in them. I have an IRA that consists of SEP contributions and non-deductible IRA contributions over the yrs. To my understanding, I can't simply open up a new IRA and contribute to the IRA and then convert that to a ROTH without paying tax on a %. I read you can convert the IRA to a 401K, which the IRS doesn't include those balances in computing your penalty when rolling over your traditional IRA to Roth. So how do you rollover your traditional IRA to a 401K when part of ira balance consists of nondeductible contributions? And if you can, then what is left would be the nondeductible IRA contributions and you rollover all of it to a roth without any extra tax, but gets to come out tax-free in retirement. It's starting to sound like I can't take advantage of this loophole.
