Thanks for your help. In Dec 2014, I contributed $5500 nondeductible fund to traditional IRA, then converted it to Roth IRA immediately. In Feb 2016, I contributed $5500 to traditional IRA for tax year 2015 and converted it to Roth IRA immediately after. In Feb 2017, I contributed $5500 to traditional IRA for year 2016 and also converted it over to Roth IRA immediately after. I also contributed another $5500 at the same time for year 2017 and also immediately converted that to Roth IRA. I think I figured it out.
For year 2014, line 1 would be $5500 and line 2 is 0. line 14 total basis is $0 (since I convert to Roth in the same tax year as contribution).
For year 2015, line 1 would be $5500, line 2 is 0, line 14 total basis is $5500 (since I did not convert to Roth until 2016).
For year 2016, line 1 would be $5500, line 2 is $5500, line 14 total basis is $5500 (since I did not convert to Roth until 2017).
for year 2017, line 1 would be $5500, line 2 is $5500, line 14 total basis is $0 (since I convert to Roth in the same tax year as contribution).
Does that sound right? Pretty much if I contributed non-deductible money to traditional IRA for a tax year, say for example 2014 during that year and immediately convert to Roth IRA, my basis in traditional IRA should be $0. But if I contributed money for prior tax year, for example I contributed $5500 in 2017 for 2016 tax year and didn't do the conversion until 2017, I should have $5500 total basis for tax year 2016.
Is there any tax penalty if I made contribution for tax year 2016 and 2017 in month of Feb 2017 for total amount of $11000 ($5500 for each year), and converted that full amount to Roth IRA shortly after. So I'm essentially contributing only $5500 for tax year 2017 but will get a 1099-R for traditional IRA $11000 distribution due to conversion of 2016 and 2017 year occurring in 2017.
Thanks so much for your help!
