I think there is a semantical difference here that it is in a gray area. That would be the best way I can describe this.
I have been reading Publication 590 and in section entitled Converting Any Traditional IRA into a Roth IRA, it doesn't mention any exceptions on what year the conversion must be reported. It states, "you can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. The amount that you withdraw and timely contribute (convert) to the Roth IRA is called a conversion contribution. If properly (and timely) rolled over, the 10% additional tax on early distributions won’t apply". It doesn't mention if the conversion happens between calendar year dates.
The biggest issue in this transaction is not the taxes you will need to pay but the 10% early withdrawal penalty. By stating this is a Roth conversion will eliminate that. Also, because of the wording offered in pub 590, as a reasonable person, I would conclude that this conversion happened in 2022 even though the actual conversion was in 2023.
My suggestion is to report this in 2022 based on the lack of official guidance from the IRS. if questioned or examined by the IRS, keep a complete transcript of this post plus a copy of Publication 590 so you can based your position on the advice you received from the community and from Publication 590.
@jhbrown42
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