Good morning,
We have a very confusing situation. So I understand the Pro Rata rule to some extent but was not sure how it would apply to our case here:
I have a big sum of pretax money in my traditional IRA (rolled over from a previous 403B) as well as about 5500 of non deductible traditional IRA investment in the same account. I understand under the Pro Rata rule, the amount converted would be proportionally taxed based on the ratio of non deductible to total amount of money in our traditional IRA, BUT was not sure how this would apply for multi year conversions of the amount to the ROTH.
For example if we converted half of the amount and paid taxes etc this year, when calculating for the following year for the next conversion to ROTH, do I simply deduct the amount of taxable money converted, and non taxable amount converted using pro rata ratio, and refile for the following year using the "left over" non deductible and the rest of the money that will be taxable?
Just trying to not get double taxed and this rule is very confusing esp about what happens in subsequent years for the left over amount! Will appreciate any experience or feedback anyone in the community has!
