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Thanks DanaB27.

I entered the 2021 1099-R as you suggested and when it asked for IRA basis for 2020 from form 8606, I entered 4093.

Then I entered '0' as the value of the traditional IRA outstanding at the end of 2020.

It calculated a taxable amount of 3388 for this year. And I hope from next year I would be clean i.e. no more basis, just new contribution.

Is all of the above is correct?

Thanks so much for your help.