Question

Taxable amount on Traditional IRA to Roth conversion

Forum|Forum|2 years ago
January 31, 2024
2 replies
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Hi All,

I have a Traditional IRA account that i contribute to and use it primarily to do a backdoor Roth IRA conversion every year upto limit. But when i received my 1099-R it mentioned Gross distribution and Taxable amount and
Taxable amount not determined and Total distribution boxes checked. This money was contributed to my Traditional IRA after taxes from my savings account and i don't owe any taxes on just converting to Roth IRA.
I also have a Form 8498 which shows the conversion to Roth IRA. Can anyone explain why this is a taxable event when i select i converted this money to Roth IRA in Turbotax? Please see attached screenshot. This was in my Fidelity account. Thanks in advance.

T

ThomasM125

It is not a taxable event. When you enter the 1099-R form in TurboTax, you need to first indicate that you moved the money to another retirement account and that you did a combination of rolling over, converting or cashing out the money. Then, enter the amount converted to a ROTH IRA. Later on you need to indicate that you tracked non-deductible contributions to your IRA. Then you will be asked for your beginning and ending basis in the traditional IRA, if you enter $0 or the same amount for each balance your distribution will not show as taxable on your return.

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D

dmertz

Employee

The amount in box 2a must be ignored (which is why box 2b Taxable amount not determined is marked) because the taxable amount of the Roth conversion must be determined on Form 8606.