Hi,
Since my AGI exceeds the IRS limit to contribute to a Roth IRA, I started making annual Traditional IRA conversions to my Roth IRA (i.e. back door contributions).
Q1 – Each year I make non-deductible contributions to a Traditional IRA and then convert 100% of the non-deductible Traditional contributions to my Roth IRA, leaving $0.00 in my Traditional IRA. Does my Traditional IRA have a basis for income tax reporting purposes?
Q2 – Should I track Roth Basis? If so where do I add Roth Basis in Turbo Tax?
(I’ve read “Roth IRA contributions and Roth conversions are all basis since those funds have already been taxed.")
Q3 – I was told, Roth Basis only comes into play for tax purposes should I withdraw money prior to age 59 1/2. Once a Roth IRA is held for 5 years and the owner is over 59 1/2 yrs old, Roth IRA basis no longer matters and all contributions and earnings are tax free. Is this a true statement?
Q4 – With respect to Q3, when does the “held for 5 years” timeline start? The first day I opened the Roth (i.e 1997) or five years from the date of the Conversion?
Thanks for your help!
