@VA_Is_ForLovers wrote:
So just to make sure, if I contribute 6500 post tax (non-deductible) to Traditional IRA and convert it in the same year to Roth IRA (AKA backdoor conversion) then my basis on form 8606 will be 0?
The link below talks about the basis equalling the sum of all non-deductible contributions. That seems to be at odds with the advise I am getting from both responses.
https://smartasset.com/retirement/total-basis-in-traditional-iras
Let's go back to 2017.
If that was the first year you did a backdoor Roth, and you had no prior balance in any other traditional IRA account, then you would include a form 8606 with your 2017 tax return that would show:
| Line 1 new non-deductible contributions |
$5500 |
| Line 2 prior basis |
$0 |
| Line 8 Roth conversions |
$5500 |
| Line 14 new carry-forward basis |
$0 |
https://www.irs.gov/pub/irs-prior/f8606--2017.pdf
Then the same thing would be true for 2018, 2019, etc. If you properly complete the Roth conversions in each year, then your starting basis and ending basis are zero every time.
The linked article is wrong in this situation because it only considers contributions and doesn't consider conversions ("backdoor" conversions).
However, you should probably file all those missing form 8606s.
