The compact that holds your funds don't matter. Are you saying that you currently have a traditional IRA consisting of tax deferred contributions plus gains?
If so, you will need to pay taxes on the whole amount in order to convert to a Roth IRA.
Or, is does your existing IRA consist of after tax contributions plus gains? In that case, it is a bit more complicated because you need to know the original contributions.
The IRA currently is a rolled-over 401k, so contributions are pre-tax plus gains.
What I want to do is contribute 5,500 post tax into an IRA, then convert the funds into a Roth. Basically, I'm wondering if I have a separate IRA, with separate funds, can I pay taxes only on the gains that the $5,500 is associated with.
Example:
I have $100k in pretax IRA invested in Vanguard Total Stock Market fund (VTSMX)
I contribute $5,500 post tax into an IRA Fidelity Total Stock Market Fund (FSTMX)
What's my tax basis for converting the $5,500 into a Roth? My Tax basis on the $100K is $0 because I've never paid taxes on that money. But the $5,500 was taxed - if I keep these funds/custodians separate, is my tax basis $5,500, or is it still 0?