Is a Roth conversion taxable in the year of conversion?

Usually, yes. A Roth conversion is generally taxable to the extent the converted amount represents pre-tax dollars. If the traditional IRA contains deductible contributions and earnings, those amounts have not been taxed yet. Moving them into a Roth IRA does not erase that income; it brings the taxable amount into the conversion year.

The key exception is after-tax basis, usually from nondeductible traditional IRA contributions. Basis is tracked on Form 8606 and can make part of the conversion nontaxable. The exam trap is assuming a conversion is either entirely tax-free or entirely taxable without checking basis.