ADP4
Level 2

Reporting Backdoor Roth on 1099-R

Context: I did a backdoor Roth IRA by opening a Traditional IRA account (i.e., zero basis / zero balance), making a $7,000 nondeductible contribution to a Traditional IRA, and then moving the entire balance in the Traditional IRA (i.e., $7,000) into a Roth IRA. However, a few days after I moved-out the money into Roth, a tiny amount of interest was added to my Traditional IRA account (about $4). 

 

Question 1: When I enter-in the payer information exactly as it appears in the 1099-R, it appears as "National Financial Services LLC as agent for" ("Fidelity Investments" is not included, since it's on the second line of the 1099-R). This feels strange -- is this correct?

 

Question 2: The 1099-R that Fidelity sent me has the "Total Distribution" checked in box 2b. It was a total distribution when I made the conversion. However, since I afterwards received an interest payment, there now is money in the IRA account that I'm reporting a "Total Distribution" from. Is that an issue?

 

Question 3: Because of my nonzero (i.e., $4) Traditional IRA balance at year-end, there should be a pro rata tax on the conversion. I see this as a $4 amount in 4b on my 1040 -- the exact same as if I had waited until the interest payment hit my and then converted the full $7,004 into a Roth. Is this correct -- the pro rata payment appears on the tax forms in the same way that a payout of earnings would?