After Tax IRA to Roth Conversion Tax Question

Generally, you cannot offset losses because your IRA basis is the total basis for all traditional IRA accounts combined together. This prevents manipulation by a taxpayer trying to use the basis for one IRA account to offset withdrawals from another account.

If you convert both traditional IRA account completely then you will use up your basis and only the amount over the basis will be taxable income. If you convert only parts of your traditional IRA accounts, then the basis will be prorated between the conversion and the value remaining in the IRA accounts.

You will get Form 1099-R for the conversion and enter it following the steps below. After you entered all your 1099-R, TurboTax will ask follow-up questions and you will be able to enter your total basis for all your traditional IRAs. The next question will ask about the value of all your traditional IRAs. That is so the prorating of the basis can be properly proportioned between the current year's distribution and the remaining IRA value. 

To enter Form 1099-R:

1. Log into TurboTax
2. Click "Federal" from the left side of your screen
3. Scroll down to “Retirement Plans and Social Security” and click “Show more”
4. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan Withdrawals (1099-R)" 
5. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
6. Click "I'll Type it Myself"
7. Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
8. Click "Continue" and enter the information from your 1099-R
9. Answer questions until you get to “What Did You Do With The Money” and choose “I moved it to another retirement account”
10. Then choose “I converted all of this money to a Roth IRA account.”
11. On the "Your 1099-R Entries" screen click "continue"
12. Answer "yes" to "Any nondeductible Contributions to your IRA?"
13. Answer the questions about the basis