Hello
Here is what I did in 2022:
- I made nondeductible contribution of $6000 to my "Traditional IRA"
- I took non-hardship distribution (in-service distribution) from my 401k. This distribution contained a majority of my 'After-Tax' contributions through the year but it also contained a small portion of "Pre-tax 401k" contribution., the amount is $260.
- I rolled over "After-tax" portion to "ROTH IRA" and "Pre-Tax" portion to "Traditional IRA".
- I then did ROTH conversion of the nondeductible $6000 along with $260 from step #2 above. There were no gains- actually small loss.
Now, I have 1099-R, with box 7 code of "2", and the gross distribution of $6260.
I understand that I don't owe any taxes on the $6000 portion since I'd categorize that contribution as nondeductible but I suppose $260 portion would need to be taxed.
If I follow ROTH conversion process then out of $6260, do I just categorize $6000 as non-deductible contribution? Which would then mean that $260 would automatically taxable and TurboTax will calculate taxes?
Should I be getting another 1099-R?
