I just received my Form 5498 from E*TRADE/Morgan Stanley and I believe there is an error in box 3. I want to verify what should be included in box 3 before I call customer service for what I'm sure will be a long aggravating conversation. When I submitted my Roth conversion request from my Traditional IRA account, I requested that both federal and state income taxes be withheld from the conversion amount. There was an error in fulfilling this request by E*TRADE that resulted in the state withholding being transferred to the Roth account instead of to my state's Tax office.
Many phone conversations later this error was corrected and transactions were added to both the Traditional IRA and the Roth showing these corrections. The balances in both accounts were correct and the state withholding amount was sent to the state's tax office from the traditional IRA account. I received a 1099R that showed the correct amounts. Fast forward to the 5498 that I received today,
The amount in box 3 equals Conversion amount requested - federal taxes - state taxes + (state taxes x 2).
It is my understanding that the amount in box 3 should be the net amount of money transferred to the Roth, Conversion amount requested -federal taxes - state taxes. This is the actual amount that was deposited in the Roth account and the amount I entered on form 8606 line 16 when I filed my taxes. Is this correct?
