If I do a Roth conversion of stock which is trading at a loss, can I use that loss to offset income as well? What would that look like and how would the tax code be applied?
If the dividends are qualified they are taxed like capital gains so the tax rate depends on your other income.
You can no longer deduct IRA losses as of 2018.
If you have no basis in traditional IRA contributions you would have no loss to deduct and the drop in value simply means that you have less deferred income on which you would eventually have to pay taxes.
@texbucki - the IRS already gave you the tax break on the stock losses within the IRA....you never paid tax on that money going into the IRA so the IRS doesn't give you a tax break on losses that occured within the IRA - as it would constitute a 2nd tax break on the same dollar.
simply, for a traditional IRA (assuming pre-tax contributions), the money is not taxed as ordinary income on the way in to the account; but it is taxed as ordinary income on the way out. There are no tax consenquenses on teh money while it is in the IRS (you can't take a deduction on your losses nor do you pay capital gains tax on your realized gains) it is that simple.