IRA to Roth Conversion - IRA Basis

Forum|Forum|2 years ago
February 20, 2024
1 reply
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Hello, I'm having issues with the IRA Basis...

Here is a timeline of what I did....

from ~ 3/1/2022 - 2/20/23: My IRA had a balance of $0.02

02/21/23 - Made a NON- Deductible contribution to my IRA

02/21/23 - Converted $6,000 of that to my Roth IRA

My 2023 1099-R has:

Box1: $6000

Box2a: $6000

When TurboTax asks for my IRA Basis, it says to look at my previous years Form 8606..

So I look on my 2022 taxes on Form 8606 line 14, and it says $0.0

Then Turbotax says I must pay taxes on that distribution .. So I'm wondering what am I doing wrong??

Thanks!

TurboTax Home & Biz Windows

Best answer by AnnetteB6

There are two things needed in your 2023 tax return to report a back door Roth IRA conversion.

First, you have to enter the non-deductible Traditional IRA contribution made in 2023. That will establish the basis in your Traditional IRA. Based on your information, prior to 2023 your Traditional IRA basis would be zero.

Second, you enter the Form 1099-R that is reporting the distribution from the Traditional IRA which is then converted to the Roth IRA. With the distribution being equal to the basis, this should be non-taxable.

Here is a TurboTax article that gives you these steps to follow so that it is reported correctly in your return:

How do I enter a backdoor Roth IRA conversion?