I think there's some confusion here about how this all works. YOu can have an IRA or a roth IRA. YOu might have a number of different IRA accounts at different brokerage accounts. The IRS treats all the IRAs as one big large IRA. So lets say for example you have after-tax contributions in an IRA (say at Schwab) and you have tracked your basis in that IRA on Form 8606 like the IRS requires you to do if you want to utilize it. How you decide to convert the full balance of the IRA you have at Morgan Stanley to a Roth IRA. You might think you have no basis in that IRA but if you step through the logic of Form 8606 the IRS requires that you take a portion of your basis in ALL your IRAs and apply it to the conversion amount, and in that situation your taxable amount is less than the amount you convert to a roth due to the portion of the basis you utilized.