Assets in IRAs do not carry a cost basis for tax purposes. Therefore, distributions and Roth conversions are taxed at the value of the assets based on their value at the close of business on the day the transaction is processed. In your example, the 1099-R should show an amount of $34,000.
(To learn more about Roth IRA conversions, check out , and Roth IRAs Tutorial.)
This question was answered by Denise Appleby