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Retirement tax questions
The gain from the recharacterization is not taxable. You only have to enter the earnings in the explanation statement.
But the gains will be taxable when you convert the amount in 2021. Here are the steps for next years 2021 tax return to enter the 1099-R conversion:
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Click "Continue" and enter the information from your 1099-R
- Answer questions until you get to “Tell us if you moved the money through a rollover or conversion” and choose “I converted some or all of it to a Roth IRA”
- On the "Your 1099-R Entries" screen click "continue"
- Answer "yes" to "Any nondeductible Contributions to your IRA?" since you had any nondeductible contributions in a prior year.
- Answer the questions about the basis and value.
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May 16, 2021
12:31 PM
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