Hello, I have tried a lot of options yet I am doing something wrong because either I am being taxed on my conversion from traditional IRA to Roth. Or if I chose other options, my 8606 is not populating correctly
My situation:
1. I contributed $6500 to a traditional IRA in 2024 (for 2023) in Dec'23. This is the first time I ever contributed to this account.
2. I received a dividend of $4.47 and I transferred $6504.47 to Roth IRA in early Jan'24
3. At the end of Jan'24, I received another dividend of $3.56 (equal to Balance at the end of Dec'24)
4. During tax filing of 2023 in April 2024, I missed mentioning anything about my traditional IRA contribution.
5. Received form 1099-R with amount $6504.47 and distribution code= 2
6. In March 2025 , I contributed $6996 to a the traditional IRA account for 2024
Filing for 2024 :
7. During tax filing for 2024, I answered this question "Tell us if you moved the money through a rollover or conversion" with "I converted some or all of it to a Roth IRA"
8. Then the following question "Did you convert all of this $6,504.47 (Box 1) to a Roth IRA?" has been answered with "Yes, all of this money was converted to a Roth IRA"
9. On the following screen, I am asked "Any Nondeductible Contributions to your IRA?" -- "Let us know if you made and kept track of any nondeductible contributions to your traditional IRA from 2023 or prior years.". The answer is "No, I did not make and track nondeductible contributions to my IRA."
10. On the following screen - "Tell Us the Value of Your Traditional IRA". Value of all traditional IRA+SEP+Simple. The answer is $3.56. I see the taxable amount rise here which seems unexpected to me as I did a conversion from Traditional to Roth IRA
11. Under the Traditional and Roth IRA section, I answer the following:
My main question is:
Why is this a taxable event if my traditional IRA contribution is a nondeductible?
Thank you
