Updated July 28, 2026. Quick answer: Ordinary income — including a conversion — stacks below capital gains. So a conversion can push long-term gains that were sitting in the 0% bracket up into the 15% bracket, adding a cost that does not appear anywhere in the conversion’s own tax calculation.
The stacking order
Long-term capital gains are taxed at their own rates, but they sit on top of ordinary income. So the amount of gain that falls in the 0% band depends on how much ordinary income is underneath it.
Add a conversion and the floor rises. Gains that were free become taxable, at 15% or more, even though nothing about those gains changed.
This produces one of the sharpest conflicts in retirement planning: the same low-income early-retirement years are ideal for both cheap conversions and 0% capital-gain harvesting — and you generally cannot maximise both in the same year. Alternating years is the usual resolution.
Which to prioritise
It depends on which problem is larger. A very large traditional IRA facing future RMDs and a 10-year emptying by heirs usually argues for conversions. A large taxable account with big embedded gains and no plan to spend them argues for harvesting — particularly since those gains may get a basis step-up at death anyway, which conversions never do.
Sources
IRC §408A (Roth IRAs); IRC §408A(d)(3) (conversions); IRC §1411 (net investment income tax); IRC §86 (taxation of Social Security benefits); IRC §6654 (estimated tax); Tax Cuts and Jobs Act (2017) §13611 (repeal of conversion recharacterisation). Cross-checked July 2026 against professional analyses. Indexed thresholds are described rather than asserted, because they change annually.
This states what the cited authority says. It is not tax advice, and a conversion interacts with the rest of your return in ways one page cannot see.