I had $15,000 in an IRA in 2000 that was converted to a Roth when the market peaked. Now it is worth $9000. But I am liable for the income tax on the value of the IRA at the time of the rollover--$15,000. How can I reduce my liability? What was the 2010 IRA conversion rule changes?

For 2000 year returns, many folks are in the same position. But Uncle Sam allows you to "recharacterize" the conversion. That means simply that you have until Oct. 15, 2001 to switch anything you rolled into a Roth in 2000 into a traditional IRA. If you convert back, you must wait at least 30 days before you can reconvert to a Roth. In your case, this means that you will be taxed only on the $9,000 (or whatever the value of the IRA is at the time of the rollover to the Roth).

The downside: recharacterization rules only allow one Roth conversion a year.

2010 change: New in this calendar year, a taxpayer can convert an existing traditional IRA to a tax-friendly Roth and spread the federal income taxes due on the converted amount equally over two years, 2011 and 2012. (You can choose to include the entire amount in income in 2010.) This is a one-time option as conversions in subsequent years are included in tax in the year of conversion. The previous income cap and the filing status requirements for upper income taxpayers was eliminated.