I have followed the instructions above, and TurboTax correctly calculates the taxes due on my traditional to Roth IRA conversion (including correctly reducing the taxable amount for the non-deductible contributions I had made to the traditional IRA). However, TurboTax is stating that a penalty of 6% is to be applied because the amount converted to the Roth IRA exceeds allowable limits. My understanding is there are no limits to the amount that may be contributed to a Roth IRA if that contribution in a result of a conversion (albeit income tax on the taxable component of the conversion is payable).
What do I need to do such that TurboTax does not apply the excess contributions penalty?
