In which situation will a taxpayer NOT face taxation on the conversion of a traditional IRA to a Roth IRA?

The conversion of a traditional IRA to a Roth IRA can have tax implications, particularly because the traditional IRA typically includes pre-tax contributions and earnings that are subject to tax upon conversion. However, the transfer of after-tax contributions to a Roth IRA is a situation where the taxpayer will not face taxation.

This occurs because the after-tax contributions have already been taxed before being deposited into the traditional IRA. When these after-tax amounts are converted to a Roth IRA, they do not incur additional taxes since the income tax liability has already been satisfied. Consequently, when these funds are transferred to the Roth IRA, only the pre-tax portion (if any) would be subject to taxation during the conversion process.

In contrast, rollovers from a 401(k) to a Roth IRA (option A) and conversions while under the age of 59½ (option B) could trigger taxes, as these typically involve pre-tax contributions. As for option D, any proposed legislation regarding the disallowance of backdoor Roth contributions does not directly affect the tax implications of moving after-tax contributions. Hence, it's the treatment of after-tax contributions that clearly avoids additional taxes upon conversion to a Roth IRA.