@dmertz wrote:
@techie353 , since you appear to have provided conflicting information in your earlier posts, I'll summarize:
- You made a Roth IRA contribution in 2021 for 2021
- Your MAGI in 2021 was too high to permit a Roth IRA contribution
- You rolled your existing traditional IRA over to your Solo 401(k) in 2021, leaving you with a traditional IRA balance on December 31, 2021 of $0.
- You have requested a recharacterization of the Roth IRA contribution for 2021 to be a traditional IRA contribution instead.
Under these circumstances, if the Roth contribution from April 2021 is recharacterized to a non-deductible IRA, then the year ending IRA balance after the rollover to 401(k) is NOT zero, correct?
For example, the taxpayer contributed $6000 Roth in April, and rolled over $50,000 traditional IRA in December leaving zero balance. If the Roth contribution is recharacterized to a non-deductible IRA, but only $50,000 was rolled over, there is a remaining IRA balance of $6000. And because there was a non-deductible basis when the rollover occurred, part of that basis is rolled over into the 401(k) and lost.
What am I getting wrong?
