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Level 3
March 2, 2023
Question

regular ira to roth ira same day same year ( back door ira ) still getting taxed the return please advise

  • March 2, 2023
  • 4 replies
  • 21 views

regular ira to roth ira same day same year ( back door ira ) still getting taxed the return please advise

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4 replies

rbynaker
Level 13
March 3, 2023

I don't know PTO, but what does your 8606 look like?

You should have a $6K nondeductible IRA contribution followed by the conversion to Roth with 100% of the basis allocated to the conversion because the FMV of all flavors of traditional IRA is now $0.

rugby1Author
Level 3
March 3, 2023

CAN I EMAIL YOU THE 8606 ?

rbynaker
Level 13
March 3, 2023

@rugby1 wrote:

CAN I EMAIL YOU THE 8606 ?


No thanks.  Pull up your 8606 and the Form Instructions and learn how the numbers flow through the form.

A quick Googling gave me this result which has an example:

https://davimanfinancial.com/a-3-part-guide-to-the-backdoor-roth-ira/

I'm sure there are other examples you can find.

Level 3
March 3, 2023

Easy-

On the 1099-R go to page 2 and look at B4 and B5 and B6

rugby1Author
Level 3
March 3, 2023

MAJOR APOLOGIZES, VERY CONFUSED, ONCE AGAIN MAJOR APOLOGIZES, B4 B5 B6 ON THE ACTUALLY 1099-R OR THE INPUT SCREEN ?

George4Tacks
Level 15
March 3, 2023

For ProConnect

Input the IRA contribution e.g. 7,000

Input the 1099R for the distribution of the excess contribution. Be sure to check the box that it is an IRA 

In this same screen CLICK 8606 See image and pay particular attention to the MINUS ONE in 2nd line

 

 

Answers are easy. Questions are hard!
qbteachmt
Level 15
March 3, 2023

Does your taxpayer have any money in any other Trad IRA account, or this Trad IRA account that received the nondeductible contribution has any other non-basis funds? If everything looks right and there is tax, it would be common for Pro Rata tax, because someone didn't understand how backdoor will be computed. It's essentially an immediate conversion, but if there are other Trad IRA account(s), other amounts that were not yet taxed (such as earnings), then this conversion will be taxed pro rata.

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