Thank you for that information. It seems as if you had a gain of $1,203 since you only made a $1,000 contribution in 2020 for 2020 and didn’t have a balance or basis from 2019. You will have to pay tax on this gain, and it was correct that the tax increased when you entered the outstanding recharacterization amount since the basis from the recharacterization has to be allocated for your 2021 conversion.
Please make sure you enter the $1,624 basis from line 14 of your 2020 Form 8606 in your 2021 tax return.
@dhuynh44
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