@DanaB27
Ok. I’m a little confused. So you mentioned to put the VALUE of the traditional IRA in basis for December 31, 2021? So, if she rolled over $14k but now the value of it after gains is $14,500, to enter $14,500 for the end of the year basis?
“For example, if you have $20000 in a traditional IRA, with $5000 being non-deductible, and you are converting $5000 this year using the back door Roth strategy, 25% will be tax free.
$5000 / $20000 (total IRA amount) = .25 or 25%.”
In this example, we already paid taxes on the $5k, are they taxing 75% of the $5k we converted? That wouldn’t make sense to tax the remaining $15k correct?
and we did not contribute anything from 2021 to 2020 from her bank account, she recharacterized maybe $2k or so in 2021 for year 2020. Thank you
