I like to make thing simple like you just said. I submitted the 2016 form 8606 yesterday and my plan was to do the backdoor roth conversion and zero out the tradditional IRA account. However Macuser pointed out something that I didnot think about. The IRS looks at the bigger picture from day one when I first got my job in my 20s and all my IRA contributions (deductible and nondeductible). All my prior combined IRA contributions (deductible and nondeductible) from various tradditional IRA accounts ended up at Fidelity today and its balance was $250 in 2015. I dont have any record of them. I only have record of what Fidelity has which is $250 in my tradditional IRA in 2015. I still do not understand what Macuser was trying tell me yesterday. Macuser implied that I may owe tax and interest.
If i was making money in these IRA accounts over the years, then.. yes.. I would have to worry about paying taxes and interests, but I never made any money. I am guessing my combined total tradditional IRA contribution up until 2015 was probably $10,000, and I lost 99% of all my contributions through investing in stocks. In 2015 the balance in my fidelity tradditional IRA is $250! I went from $10,000 to $250 in my tradditional IRA. How could I owe tax and interest to the IRS? Please explain.
