FEIE and Roth Conversion... a $103,900 tax free conversion?

[pmac]

Imagine you qualify for the Foreign Earned Income Exclusion (FEIE) and the only "earned" income you had for the tax year was a $103,900 traditional to Roth IRA conversion.

Would this whole conversion be tax free?

[dandarc]

Is that Foreign Earned Income? I don't think so - from wikipedia:

The exclusion is limited to income earned by a taxpayer for performance of services outside the U.S. This includes salary, bonus, and self-employment income. Where income relates to services both in the U.S. and outside the U.S., the income must be apportioned.

[walkwalkwalk]

Is that Foreign Earned Income? I don't think so - from wikipedia:

The exclusion is limited to income earned by a taxpayer for performance of services outside the U.S. This includes salary, bonus, and self-employment income. Where income relates to services both in the U.S. and outside the U.S., the income must be apportioned.

Correct. Confirmed and case closed.

[MustacheAndaHalf]

Conversions aren't "earned" income, so you can't apply the foreign income tax exclusion to a Roth Conversion.

Even worse, income below the foreign earned income exclusion can't be counted as income for contributing to a Roth IRA.  So if you earn below $103.5k, you can't contribute to a Roth IRA.  And existing restrictions also remain in place: if you earn over $137k income you also can't contribute to a Roth IRA.  So it's harder getting money into a Roth IRA when you have foreign income, rather than easier.