Thank you for your continued help. I researched our joint federal tax returns (TurboTax Deluxe) back to 2014 following the 8606 trail to see what my husband’s basis was:
By 2014, Line 14 on the 8606 was 11.
By 2015, Line 14 on the 8606 was 1.
By 2016, Line 14 on the 8606 was 0.
Our federal returns for 2017, 2018, and 2019 had no Form 8606s filed because there was no “basis” left thus all IRS distributions from 2017 forward are fully taxable, right?? Therefore in 2020, the $100,000 I converted from my traditional IRA (formerly my husband’s) to a ROTH IRA plus the $25,000 distribution I took totals $125,000 that is taxable because it originates from deductible contributions (no basis). Am I correct in all this? 😬
2nd Question: My 2020 Back Door Traditional IRA Conversion to a ROTH IRA generated a 2020 Form 8606. Part II is filled in:
Line 16 $100,000
Line 17 $0
Line 18. $100,000
There are 3 questions on the 8606 to answer to see if I need to fill out Part 1 and I am confused. I have no Basis; I haven’t made nondeductible contributions in 2020; I did take a $25,000 distribution in 2020 and I did convert $100,000 from a traditional IRA to a ROTH IRA. So am I to assume I need to fill out Part 1? I googled the heck out of the Internet all weekend plus read the 8606 publication and I am still stumped. In TurboTax I would switch from “Step-by-Step” to “Forms” and I would be manually filling in Part 1 if necessary (I assume?).
Hopefully I haven’t completely confused you. 😮
