I hope you found the article informative.

Unfortunately, IRA money is seen differently than your taxable investments. If your IRAs are worth less than the non-deductible contributions you made over the years, you do get to claim the loss in value. But you don't claim this as a capital loss that you get to carryover indefinitely. Instead, you claim this loss as a Miscellaneous Itemized Deduction.

The problem is that Miscellaneous Itemized Deductions are only allowable to the extent they exceed 2% of your income, and then are disallowed if you are in the AMT.

Even so, based on the fact that your IRAs are worth less than your non-deductible contributions made over the years, converting most likely makes sense for you.

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