I have currently two IRA accounts . 1. Rollover IRA (401k from previous employer), 2. Roth IRA. with some balance in each.
I want to do a backdoor IRA by opening a new Traditional IRA account , add $ and then move that amount to the Roth IRA . I was told that the below computation needs to be applied to calculate what percentage of the transfer is tax free
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Tax-Free Percentage= TND / (YV C)
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where:
TND=Total non-deductible contributions
YV=Sum of year end value of all IRA accounts
C=Conversion amount
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my Question is , should the balance in Rollover IRA be included in calculating YV from above .
