Roth Conversion while living abroad

[Ready]

Hypothetical situation.  Researching living abroad.
Roth Conversion Ladder while abroad, living away from the U. S. for more than 183 days a year. 

When I do a Roth Conversion from my tIRA, does that “income” fall under the “earned income” for purposes of Foreign Earned Income Exclusion?

I am using the Roth Conversion Ladder as my income besides about <2k worth of interest and dividends.

[secondcor521]

Not an expert, but I serious doubt it.  It's neither foreign nor earned.

"Foreign earned income for this purpose
means wages, salaries, professional fees,
and other compensation received for
personal services you performed in a
foreign country during the period for which
you meet the tax home test and either the
bona fide residence test or the physical
presence test."

-- Form 2555 instructions at https://www.irs.gov/pub/irs-pdf/i2555.pdf

[reeshau]

@secondcor521 is 100% right.

If there was a loophole that big, then you would have heard a lot more about it.  :)

In addition, be careful that you aren't in a jurisdiction that may tax residents globally, (particularly, investment income) or it could get caught up into your local taxes, too.  Most US tax treaties today don't even recognize the Roth as a type of pension, so collisions of tax codes can get messy.  The other jurisdiction may treat the Roth as a taxable investment account, at conversion and ongoing if you make trades in it.

[Ready]

@secondcor521
Thank you for the response.  I think form 2555 might be the only doc I didn't find to look at, so glad you pointed it out to me.

@reeshau
Totally agree about the needing to look at the local jurisdiction for their tax requirements.  I actually could find that information easier than I could definitively find the IRS answer it would seem.  And yes, the Roth is not great for avoiding taxes in the foreign country, but the conversion is needed for me to show a certain amount of income.

[uk_american1]

I am dual passport US/UK, residing in the UK.

I converted a 12k traditional IRA to Roth last year when the market was tanking.

My accountant does my US and UK taxes. She logged it on the 1040 4B, IRA distributions and then form 8606 nondeductible IRAs, part 1 and part 2 covers the conversion.

I am coast fire, in the 10% bracket. I owed nothing to the US or the UK on the conversion.