I contributed to a Roth IRA in 2021 not knowing there was an income limits and had to do a recharacterization after Tax Forms sent by financial institutions. I want to make sure we are filling out the Step-By-Step boxes correctly.
I contributed $6,000 to Roth IRA. According to financial instituitions, I had a loss of $354.75 on the contributions. So $5645.25 was transferred to Traditional IRA.
1. Repayment of a retirement distribution Traditional: No.
2. Traditional IRA Contribution $0 ; $0 between January 1st, 2022 - April 18, 2022
3. Recharacterized Contribution Traditional to Roth IRA: No.
4. Excess IRA Contributions Before 2021: No.
5. Nondeductible Contributions to Traditional IRA Before 2021: No.
6. Repayment of a retirement distribution Roth: No.
7. Roth IRA Contribution $6000
8. Recharacterized Contribution Roth to Traditional IRA: $6000 or $5645.25 (with losses)
9.a. Date of the Original Contribution: 4/7/2021, 5/12/2021, 9/25/2021
9.b. Date of the Recharacterization: 2/22/2022 & 2/24/2022
9.c. The Amount Recharacterized: $6000.
9.d. The Amount Transferred (Recharacterization plus earnings or losses): $5645.25
9.e. Reason for the Recharacterization: Not eligible for Roth IRA
Please help me on what goes in "step 8" for the recharacterization amount. The gains and losses aspect confuses me on if I enter that value ($5645.25) OR the contribution amount ($6000).
I think it is the $6000 as the other amount results in a penality, but I am not a tax expert.
Thank you!
