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Deductions & credits
To sort all of this out, rather than talking in rather vague terms and bits an pieces about the timing of transactions, the dates, amounts of contributions (an the year for which a contribution is made), distributions and conversions would be helpful as well as the year-end balance in traditional IRAs each year. I'm kind of lost at this point as to the details. But keep in mind that this is a public forum, so you'll want to take into consideration how comfortable you are sharing details.
To summarize my understanding at this point, I think you have done the following.
1. At the beginning of 2017 you had no basis in nondeductible traditional IRA contributions but had a nonzero traditional IRA balance.
2. You made a nondeductible traditional IRA contribution of $5,500 for 2017 in 2017
3. You did a Roth conversion in 2017 with the taxable and nontaxable amounts calculated on Form 8606 (maybe involving Worksheet 1-1), leaving you with a nonzero 2017 year-end balance, so some of your basis from the $5,500 contribution for 2017 carried into 2018 (2017 Form 8606 line 14 carrying to 2018 Form 8606 line 2).
4. You made a nondeductible traditional IRA contribution of $5,500 for 2018 in 2018.
5. You did a $5,500 Roth conversion in 2018, leaving you with a $4,900 2018 year-end balance in traditional IRAs.
If all of this is correct, your 2018 Form 8606 would calculate taxable and nontaxable amounts on your $5,500 Roth conversion in 2018 and some of your basis would carry forward to 2019 along with the $4,900.
To summarize my understanding at this point, I think you have done the following.
1. At the beginning of 2017 you had no basis in nondeductible traditional IRA contributions but had a nonzero traditional IRA balance.
2. You made a nondeductible traditional IRA contribution of $5,500 for 2017 in 2017
3. You did a Roth conversion in 2017 with the taxable and nontaxable amounts calculated on Form 8606 (maybe involving Worksheet 1-1), leaving you with a nonzero 2017 year-end balance, so some of your basis from the $5,500 contribution for 2017 carried into 2018 (2017 Form 8606 line 14 carrying to 2018 Form 8606 line 2).
4. You made a nondeductible traditional IRA contribution of $5,500 for 2018 in 2018.
5. You did a $5,500 Roth conversion in 2018, leaving you with a $4,900 2018 year-end balance in traditional IRAs.
If all of this is correct, your 2018 Form 8606 would calculate taxable and nontaxable amounts on your $5,500 Roth conversion in 2018 and some of your basis would carry forward to 2019 along with the $4,900.
‎June 4, 2019
8:04 PM