The problem is that this transaction is considered income by the IRS
when you transfer from a traditional IRA to a Roth IRA. Did a financial advisor tell you to transfer these funds in this manner? IF so, I would find another advisor. At the age of 65, there is little to no benefit
of transferring funds from a traditional IRA to a Roth IRA unless you expect to be in higher income tax brackets later on in your retirement.
You get a 1099 when you make this transfer, as it is considered income to the IRS. This is why you had to claim it on your income tax, and if you had other income
you are correct you would have to pay more tax because of this transfer, as it pushed you into a higher bracket.
I'm sorry you find yourself in this situation, but the unfortunate truth is that you have to pay tax on that transfer just as if you took all the funds as income in that year. But, now, you can take money from that Roth account completely tax free.
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