This tax year 2020, I contributed $3932 to my traditional IRA. At the end of the year, based on my earned income, capital gains and the fact that I have a retirement plan through work, I found out that none of that traditional IRA contribution was tax deductible.
Over the course of the year, my traditional IRA portfolio did very well, and experienced significant gain.
I understand that by recharacterizing the contribution to a Roth IRA, that the initial contribution itself, the $3932, is not taxable. However, I am confused as to whether or not the resulting net income attributable (NIA) is taxable even though I plan to recharacterize it into a Roth, as well?
I have read other example where people over-contributed and were tax on the NIA, I guess because it was considered income. However, I didn't over contribute, I just "mis-contributed." So I was hoping since I am putting the NIA in the Roth as well, it would not get taxed.
Thanks!
