Hello,
I am married, we file our taxes jointly, and our MAGI is over $208,000 so we are not allowed to contribute directly to a Roth IRA plan.
I made a Traditional IRA contribution of $6,000 in Dec/2020 (post-tax), and without investing in any stock, so no capital gains were added to the amount, I immediately converted the full amount to a Roth IRA plan.
I received the 1099-R for the tax year 2020 from the broker with the amount of $6,000 on both boxes 1 and 2a (Gross distribution and taxable amount). Box 2b was checked (taxable amount not determined) and also "Total Distribution" field was checked. Field 7 had the distribution code "2", and the IRA/SEP/SIMPLE box was checked.
When I added this information to TurboTax the amount of taxes due go up. I believe this should not be the case and that the distribution code should have been "R". Is this correct? Or I will receive another 1099-R for the tax year 2021 with the distribution code "R"?
I am planning to keep doing this conversion every year.
Thanks!
Andre
