Here's what I understand so far. Would you be nice enough to check and see if I am correct?
Basis is the amount I contributed to a particular IRA account.
Since I recharacterized $3000 (I am just going to round it up for easier math) in March 2022 from roth to traditional IRA for TY 2021, I have a basis of $3000 for my traditional IRA for TY 2021.
I also recharacterized $6000 from roth to traditional IRA for TY 2022, hence it brought my traditional IRA basis up to $9000 after the 2nd recharacterization (although it is the only recharacterization for TY 2022).
However, I had a loss from the date of original contribution to the date of recharacterization. Hence the actual amount that was recharacterized was $4000.
I then converted the $7000 from traditional IRA to Roth IRA as a backdoor IRA in August.
The conversion was a taxable event and therefore $7000 was minus from $9000.
Therefore my traditional IRA total basis by 12/31/22 is $2000. Although my traditional IRA account balance is 0 at that point.
The $2000 will be brought over to TY 2023 when I do another contribution and conversion again. and the math will work the same way as I mentioned above.
@DanaB27
