The law only allows people (single or married) with an MAGI of $100,000 or less to convert their traditional IRA into a Roth IRA. For a conversion to a Roth IRA, the amount converted will be subject to full taxation. However, the funds will not be subject to a 10 percent premature-distribution penalty. Rollovers from a traditional IRA to a Roth IRA are not subject to the one rollover per 12-months rule.
Additionally, the law provides that for conversions to Roth IRAs completed in 1998 the taxes may be paid ratably over a four-year period. After 1998, such conversions are fully taxable in the year of the distribution.