Hello,
I have the downloaded software TurboTax Premier and I'm trying to deal with this issue with Backdoor Roth and a Rollover IRA.
So my scenario is this:
1. In 2020, I found out I no longer qualified for contribution to Roth IRA based on the income limit.
2. I re-characterized $3,000 of my Vanguard Roth IRA to a new Vanguard Traditional IRA, added $3,000 more post-tax dollars, then did a backdoor ROTH IRA conversion of all $6,000 on Vanguard.
3. Being new to Backdoor, I found out about the Pro-Rata rule and thought it didn't apply to me since my Vanguard Traditional IRA had zero value.
4. However, I failed to notice that I had a Rollover IRA in Fidelity (rolled over from an old 401k in 2015 at the value of $2,746.69 with no post-tax contribution to this day. The ending value at 12/31/2020 is $5,742.35).
5. I plan to move this rollover IRA to my current company's 401k, but it's already 2021.
I was about to start filling in my IRA Basis with $2,746.69 (assuming the original rollover value as IRA basis input), however, I stopped short after reading this from the TurboTax Help pop up on the "Learn more" link in the "Let's Find Your IRA Basis" section.
It said: "Your IRA is the total of all your nondeductible IRA contributions (and for all of your traditional IRA accounts, if you have more than one). Contributions do not include rollovers."
That statement above contradicts what I have read on online forums. But I maybe reading it wrong. Would someone be able to help explain if I still need to file the form 8606? despite the statement: "Contributions do not include rollovers"? If so, would the IRA basis be the original rollover value: $2,746.69 or the value at 12/31/2020 ($5,742.35)?
Thank you!
