Under Federal Taxes - > Wages & Income - > Retirement Plans and Social Security
I chose to Update "IRA, 401(k), Pension Plan Withdrawals (1099-R)"
I then reviewed the information for my Traditional IRA to Roth IRA Conversion 1099-R that was imported from my vendor.
(the numbers below are just used for simplicity reasons and not the actual amounts)
Gross Distribution of $100,000
(x) Form 1099-R withdrawal of money from 401(k) retirement plans, pensions, IRAs, etc. {Continue}
Information was imported from vendor showing:
1 Gross Distribution: $100,000
2a Taxable Amount: $100,000
4 Federal Income Tax Withheld: $25,000
7 Normal Distribution shown
What did you do with the money?
(x) Moved the money to another retirement account
(x) Did a combination of rolling over, converting, or cashing out the money
(x) Tell us how much of the $100,000 was moved to another retirement account?
(x) Amount converted to a Roth IRA account $75,000 [$100,000 IRA amount - $25,000 taxes = $75,000]
After all of this here is the question:
Form 8606 only has two entries as follows:
Part II:
16: Otherwise enter the "net amount" you converted: $75,000
17: Enter your basis: $0.00
18: Subtract line 17 from line 16: Taxable amount $75,000
It is the "Taxable Amount" that is confusing as it is $100,000 (all the money withdrawn from the IRA should be taxable), and this is what is included on line 4B of the 1040-SR.
So in my opinion the 1040-SR line 4b is correct with the full taxable amount $100,000. So my bottom line tax amount is correct but why does the 8606 reflect $75,000 as the taxable amount in Part II: Line 18?
Let me know if you need further information. I have tried to be as detailed yet succinct as possible.
Cheers,
