What is the taxable amount if you convert an IRA to a Roth IRA that is in an annuity if the current account value is lower than the total premium put in and the death benefit is higher than the current account value? Is Fair Market Value based on the current account value? I was told that the death benefit will be used as the calculation in what is taxable from the insurance company. I can’t understand how that is possible when the death benefit isn’t received until the individual passes, and if it get recapture then I can certainly understand, but why would I be taxed on something that I may never see and it’s possible that the account value will continue to go down and the beneficiary will never see either. Is there something in the revenue code that specifically dictates or is there a interpretation ruling that clarifies that death benefit needs to be used as part of the calculation when you convert an IRA to Roth IRA when the qualified plan is being held in an annuity?