You pay taxes on the value of the stocks you trans

You pay taxes on the value of the stocks you transfer to the ROTH the day the broker makes the conversion.

Say you have $100K in CTIX today  (40,000 shares @ 2.50) and CTIX gets bought out in 18 months for $100/ share.

You convert today @ whatever it closes at - say $2/share so you have to pay 2012 taxes on $80K.  You then get to take out the 40,000 x $100 =  $4,000,000 TAX FREE.  Thus, you paid taxes on $80K versus $4MM on your investment.

IN MOST CASES, it is better to convert IRA to ROTH IRA rather than buying new stock.  This may not be true w/ CTIX because the future growth of newly bought shares is so great in CTIX and in most normal stocks it is only a small multiple at best.

I will be putting in $12K 1/2/13 to my wife and my ROTH's and that will conclude my CTIX purchases.  I will then have about a 50/50 split in a regular stock acct that will be fully taxed at long term holding rates and a fully tax free ROTH acct.

A ROTH must have been opened for at least 5 years before you can take funds from it without a penalty.  If you open one today, it counts as being opened 1 jan 2012.  You can withdraw your deposits from a ROTH within 5 years at no penalty but you cannot withdraw earnings before 5 years without a penalty.  Just found that out today.  Pretty sure ROTH also has the withdrawal requirements starting at 70 1/2 or you pay massive fines.