Subject: Re: 401k
You have to look at the entire picture. What happens is that people look at the outside funds used to pay the tax at conversion [the $2400] as "magic money" and don't consider the alternative use you could put it to. The correct alternative to consider is "invest it the same way".

That's exactly what I show. In the do not convert case, the $2400 in taxable grows to $4800, and our investor pays 10% cap gains on the $2400 gain.