Advantage: IRA withdrawals are taxable income, Roth IRA
withdrawals are tax free.
Disadvantage: The entire balance transferred in the conversion
counts as taxable income in the year the
conversion occurs.
Thus, the greater your taxable income in the year of conversion the worse are the odds of gaining by the transaction (that is, the greater the percentage of the IRA that has to be liquidated in order to pay the taxes).
Shane Mage
"When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly.
When we read on a computer screen the doctrine of Pythagoras that all things are made of numbers, it seems self-evidently true." (N. Weiner)