This is what I did- please see below.
Under Deduction & Credits section,
I selected the check boxes for both Traditional and Roth IRA check box.
For Traditional IRA part
- What should I enter for how much I contributed to 2020 Traditional IRA 2020? Do I enter the amount after Roth to Traditional recharacterization which is less than $6000 that I had incorrectly contributed to Roth and converted to Traditional? If so, then this is $5969.. because between incorrect contribution to conversion to Traditional there was a loss. Or Do I enter original $6000 that I contributed to Roth and converted to Traditional with a loss?
- I said YES to any non-deductible contributions to Traditional IRA from 2019 or prior years. For cost basis as of Dec 31, 2019- I entered 2019 Form 8606 line 14 value.
- It says IRA basis from 2019 is different from the basis entered. Something wrong looks like.
For Roth IRA part
- I entered $6000 as Roth contribution- assuming this was the original $6000 contribution I incorrectly made. Is this correct?
- Then for How much I transferred to Traditional IRA, I entered $5968, because there was a loss of $32 by the time I did this conversion.
- Then on explanation statement, I entered the date of original contribution, data of recharacterization and amount recharacterized, etc.
- Then TurboTax said my MAGI puts me over the limit of IRA deductions. So I have excess contribution. Then TurboTax said my MAGI puts me over Roth limit. TurboTax and said I put in to Traditional ($5968) is considered excess contribution and I owe 6% penalty.
Under Tax Tools, Federal Tax Summary
- Shows on 1040 line 4 a that I have IRA distribution that matches to what I entered from 1099-R with code 02 as above.
- Shows on 1040 line 4 b now shows 0, so no taxable amount.
So, as you can see there is something wrong still.
