Thanks so much! I have been struggling with this for days now!!! Your explanation is the first one that makes sense to me.
Since I did not do any of these other things you mention, sounds like I only need to file a 2019 Form 8606.
- Can I just send it in with my 2020 return or should I send it in solo?
- Also, do I only report $7000 on Form 8606, line 1? From your explanation, I think that the $730 of interest (that was ostensibly earned on it) should be/will be taxed when I start withdrawals from the Traditional IRA. It should not be part of my basis, since it has not yet be taxed, unlike the $7000.
