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Yes - you may rollover funds from your traditional IRA to Roth IRA and you will be taxed on that conversion the same way as if you were taking distribution.
Thus - the basis $34,000 will be rolled over tax free and $4400 will be added to your other taxable income.
Let me know if you need any help with reporting.
You will receive form 1099R reporting your distribution.The administrator doesn't have any knowledge about you having a basis in your IRA - so do not be surprised if the full amount of rollover will be reported as taxable.When you file your tax return - you will report that rollover transaction on form 1040line 15a - full amount $38400and line 15b - taxable part of your distribution - $4400The IRS shoudl know about your nondeductible contributions because every year you made nondeductible contributions - you reported these amounts on form 8606.So theer should not be any questrions form the IRS.Thus - you will have $4400 added to your other taxable income..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.