If you make a nondeductible contribution of $6,000 in 2022 and convert it in 2022 and assume (unrealistically) that the value didn’t change on Dec 31, 2022, the calculation would be like this:
Value in traditional, SEP, and SIMPLE IRA on Dec 31, 2022 $20,000
Distributions $0
Conversions to Roth $ 6,000
Total $26,000
Basis $5,712 + $6,000 = $11,712
$11,712 / 26,000 = 0.45
Nontaxable Conversion part $6,000 x 0.45 = $2,700
Therefore $3,300 are taxable.
The leftover basis of $9,012 can be used for future distributions and conversions.
Your basis for 2021 "$5,712" will be reported on line 14 of Form 8606 but TurboTax will make all these calculations for you on Form 8606 for the tax year 2021 when you answer all the questions in the interview.
Next year, all you have to do is check line 14 on Form 8606 from your 2021 tax return and enter this amount in your 2022 tax return when TurboTax asks about the prior year basis.
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