Sorry that I did not explain the situation above clearly. Here is the restate of the situation and the problem I found in the TurboTax, Taxable IRA Distribution worksheet:
I have a basis carried from 2023 return in the amount B.
I made my 2024 non deductible IRA contribution in 2025 in the amount C.
I converted in the amount R from my tradition IRA to Roth in 2024.
On 12/31/2024, the total balance of all my IRA accounts is T.
I manually calculated the nontaxable portion of the conversion as B/(T+R) multiplied by R.
I went through TurboTax interview questions, it gave me a higher nontaxable portion than I manually calculated. So I went through the Taxable IRA distribution worksheet. I found out in Line 8, it used (B+C)/(T+R) multiplied by R, hence resulted a higher nontaxable portion.
I then manually filled out the Form 8606, it also calculated the nontaxable distribution amount as B/(T+R) multiplied by R, the same as my hand calculation. It only added C to the remaining basis from 2023 to be the new 2024 basis.
If you compare TurboTax worksheet to Form 8606, you can see that worksheet skips the step of subtracting C from the total new basis (B+C) before calculating the ratio.
My conclusion, TurboTax made a mistake in this case. How can I fix it in the software manually?
Please advise. Thank you!
