Hi @DanaB27, you were a big help to me last year. I amended my 2020 and turned in my 2021 returns but upon trying my 2022 return the numbers didn’t seem to add up so I’m taking a look back at 2020 to start.
“Please be aware, that earnings that were earned in the Roth IRA before recharacterizing are not included in the basis of the traditional IRA. They are deemed to be earned in the traditional IRA and therefore will be taxable when you make a conversion. Therefore, your total basis should be $2,000 for 2020”.
To recap:
- $1237 recharacterized in 2020 ($1000 contributed)
- $1000 directly to traditional in 2020
- $1000 directly to traditional in 2021 for 2020
- $1317 recharacterized in 2021 for 2020 ($1000 contributed)
- 1099-R code = N $1237
- 1099-R $2203
In a post earlier in this thread I mentioned: if I received a 1099-R box 7 = N for 2020 for $1237. I contributed $1000 to Roth, then when I recharacterized this amount became $1237
- Under "Deductions and Credits" when it says to "Enter Your Roth IRA contributions" ----- Enter total Roth IRA contributions for 2020 even if you transferred, or "recharacterized" some or all of it to a traditional IRA" I would input $1000 correct?
- On the next screen it asks for the AMOUNT TRANSFERRED should be $1237 according to @MinhT1 due to gains on my 1099-R. Is this correct?
- If I do this my Line 1 on form 8606 becomes $1237
Do I do add this same thing for as stated above for my recharacterization of $1317 in 2021?
- How much Roth did you contribute: $2000
- How much if this amount did you transfer? $2554 ($1237 + $1317)
This makes line 1 on 8606 $4554. Should this be $4000 (contributed) or $4554 (contributed + earnings)? After doing to calculations on the worksheet should the the $554 (gains from recharacterizaions) be included in my line 14 basis ($2000 or $2554?).
thank you!
