dmertz
Level 15

Get your taxes done using TurboTax

First, you recharacterized $6,000, not $5,500.  $5,500 was the loss-adjusted amount transferred to the traditional IRA, not the amount recharacterized.

 

Q1:  The resulting $6,000 traditional IRA contribution is reportable either as deductible on 2021 Schedule 1 line 20 (only if you are permitted to make a deductible traditional IRA contribution) or as nondeductible on 2021 Form 8606.  Your 2021 tax return also needs to include an explanation statement describing the recharacterization, particularly that the amount transferred to the traditional IRA was less than that amount recharacterized due to investment losses.  If you already filed your 2021 tax return you'll need to amend it;  you can provide your explanation on Form 1040-X.

 

Q2:   The Roth conversion that occurred in 2022 will be reportable on your 2022 tax return on Form 8606 with the resulting taxable amount propagating to Form 1040 line 4b.  Any amount appearing on your 2021 Form 8606 line 14 ($6,000 if the entire contribution was treated as nondeductible) will appear on line 2 of your 2022 Form 8606.  You'll receive the 2022 Form 1099-R (code 2 or code 7 depending on your age) near the end of January 2023.

 

You'll also receive a code R 2022 Form 1099-R for the recharacterization.  You can ignore that form because the explanation statement that you provide with your 2021 tax return will have already provided the necessary information.