Thanks for that - I don't mean to come across as dense but it is clear you know exactly what the issue is and I am struggling.
Here's what I did.
1) In the 1099-R section, I imported the 1099-R, it shows 11500 ( 6000 + 5500) as total distributions
2) I said Yes to whether I tracked non-deductible contributions
3) In the area where it says to enter 2018 Total basis - I do not have a 2018 Form 8606 to copy this from but rather than saying 0 , I entered 5500 this is what I understood I should enter based on the last post.
In the IRA interview
1) I did say 6000 is what I put in 2019
2) It once again asks if I track nondeductible contributions and pulled the number of 5500 that I entered from the 1099 R interview.
3) It did ask a question - What is the value of your traditional IRA as of Dec 31, 2019 - I did not know what to enter here - would it be 6000, 11500 or zero considering it was all converted? None of the values seemed to impact my tax liability which was much higher because TT calculates a taxable income of USD 3943 ( see below)
The net effect of all of this 1) it removed the penalty which is great 2) It said that I do not qualify for an IRA deduction because of my income. Fine but when I look at form 8606 line 18 now has a taxable amount of USD 3943 ( with an asterisk) when I would have expected a zero dollar taxable amount - I just don't understand this. Here are some other numbers from my form 8606
Line 1: 6000
Line 2: 5500
Line 13: 7557
Line 14 : 3943
None of this should be taxable if the numbers were reconciled correctly. USD 5500 should go towards 18, 6000 towards 19 - no excess, no taxes. I am just not sure why the numbers pan out this way.
Thanks in advance.
