Thanks for the answer. Sorry there was an error in my description above. I meant to say that I contribute the max amount allowed to the Traditional IRA and then convert the same amount to a Roth within a few days. This results in the accumulation of interest in the Traditional IRA while I'm waiting for the cash to be available for the conversion. I do not convert the interest over to the Roth.
I do not understand why the $1 is considered a taxable distribution this year since the money is in the Traditional IRA. I would have expected to pay taxes on it if I take a distribution but it shows up on line 4b IRA taxable amount.
