Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.
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My understanding is that it is based on 2010 rates, you just get to defer the payment to 2011 and 2012. The rationale is the encourage up-front conversions. You should check with your tax advisor though.
I am a CPA and CFA, but I don’t practice in the tax or investment areas.
