Converting a Traditional IRA to Roth IRA

Traditional Individual Retirement Agreements (IRAs) can be converted to a Roth IRA, however these conversions are taxable transfers.  In order to report a conversion, the taxpayer will be issued Form 1099-R showing the total distribution made from their Traditional IRA account.  The full distribution does not need to be converted to a Roth IRA, however, any amounts not converted are subject to additional taxes and penalties.  Conversions must be reported on Form 8606, Part II.  Form 1099-R must be entered into the tax program before computing the taxable amount on Form 8606.