@dmertz - I am starting think that @69VanNuys is correct and something has been overlooked in the IRS 590-B instructions.
What do you think?
Follow this --- assume
$6,000 2019 contribution.
$6,000 2020 contribution made in Feb 2021 *for* 2020.
2020 1099-R $12,000 converted to Roth
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This produces a
8606 line 1 = $6,000 (2020 contribution)
8606 line 2 = $6,000 (2019 contribution)
8606 line 3 - $12,000 (line 1+2)
8606 line 4 = $6,000 (contribution made in 2021 for 2020)
8606 line 5 = $6,000 (line 3 - line 4)
TurboTax uses the IRS worksheet 1-1
The worksheet uses the total of the $12,000 contributions to arrive at the non-taxable amount of $12,000 on line 8 of the IRS worksheet that is line 11 on the TurboTax version.
But note: the IRS pub 590 prior to the worksheet 1-1 (under Contribution and distribution in the same year) says when to use the worksheet and step #4 says:
4. if line 5 of Form 8606 is less than line 8 of Worksheet 1-1, complete lines 6 through 15c of Form 8606 and stop here.
Well, as I read it, line 5 of the 8606 is $6,000 and line 8 (TurboTax line 11) is $12,000 so the worksheet should NOT be completed and the remainder of the calculations should be done on the 8606 lines 6-15c.
Am I reading that right and TurboTax is doing it wrong or am I missing something ??
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
