@DanaB27
Thanks, what are your thoughts on this comment?
“I agree with Diane who told you that you have a 0 basis for the traditional IRA. You had a basis that equaled what you paid into the traditional IRA, but you reduced it to 0 when you converted.”
You are saying I have a $2k basis for end of year 2020 for the amount I recharacterized in 2021 for year 2020, and ended up converting it in 2021. Since I converted it in 2021, does the conversion count for year 2020 or 2021? If the $2k in Basis holds true, how does this affect paying taxes in either 2020 or 2021?
What we were doing for our traditional, as recommended by my financial institution, was convert the after tax dollars we contributed right away to Roth, as these were just held as cash and not in any stocks or funds. Essentially with the exception of $500 after tax remaining in the traditional, we converted all of the after tax dollars to Roth. I want to ensure we input this correctly as to not pay any unnecessary taxes for and pretax amount still sitting in our traditional. Thank you
