What is a Roth IRA conversion?
Created by the Taxpayer Relief Act of 1997, a conversion is a taxable movement of assets from a Traditional IRA (including a Traditional IRA that holds simplified employee pension (SEP) plan contributions) or a savings incentive match plan for employees of small employers (SIMPLE) IRA to a Roth IRA. For a SIMPLE IRA, an individual must satisfy a two-year waiting period, which begins on the date the employer deposits the first SIMPLE IRA contribution, before she may convert SIMPLE IRA assets to a Roth IRA.
Certain individuals may roll over their employer-sponsored retirement plan assets to a Roth IRA. See "What is an employer-sponsored retirement plan-to-Roth IRA rollover?" for more information.