Thank You for the reply. I’m starting to understand, but I still need some help. Let me further explain what I did.
on 2/26/2020 I made a non-deductible contribution of $7000 (vs. $6000 as previously stated) to a traditional IRA for the 2019 Tax year, and converted it to a Roth IRA on the same day (no capital gain). Starting and ending value in the traditional IRA was zero. For my 2019 return my 8606 form shows $7000 on line 1, zero as basis on line 2, and $7000 on line 14. My 1040 for 2019 is blank for line 4a and 4b.
On 3/22/2021 I made a similar transaction. I made a non-deductible contribution of $7000 to the traditional IRA for the 2020 tax year, and converted to my Roth IRA the same day. My 2020 return form 8606 shows $7000 on line 1, $7000 on line 2, and $14000 on line 3. Line 14 shows $7000. The 2020 form 1040 shows $7000 on line 4a and zero on line 4b. Is this correct?
That brings me to this year’s 2021 return.
On 12/31/2021, I made a similar transaction as the other two, except for this all occurred in 2021. I made a $7000 non-deductible contribution to the traditional IRA, and converted it to the Roth IRA on the same day.
In TurboTax, in the wages & income section, when I input $7000 for the Total Basis from my most recent 8606 form, it tells me that the IRA Basis TurboTax transferred from 2020 is different from the basis entered, and asks for an explanation. Following your example above, should my basis be zero now, because the latest transaction was made in 2021 for the 2021 tax year?
Im trying to figure out if I did something wrong on my 2019 and 2020 returns, and make sure I’m doing things right on my 2021 return. Depending on the basis entered this year, it changes my refund amount by $2240.
I’m more concerned about getting this right, vs. the size of the refund. Any further assistance would be greatly appreciated.
Thank You!
