@dmertz This helps, but I do have a few more clarifying questions:
- Given that the conversion happened in 2023, wouldn't I report the conversion on my 2023 tax return via Form 8606?
- You said, "Because the rollover from the 401(k) means that you will have a nonzero balance in traditional IRAs, your Roth conversion of the recharacterized funds will be partially, perhaps mostly taxable, calculated on your 2023 Form 8606."
- Wouldn't I just be taxed on the ~$10 earnings of gains that occurred by leaving the recharacterized money in the traditional IRA before converting back to Roth?
- To make sure my Traditional IRA account balance is empty, the rollover from the 401(k) to the traditional and Roth will soon be re-rolled into my new employer 401(k) plan to ensure the pro-rata rule is being followed. If all my non-Roth IRA's are empty by year-end, wouldn't the pro-rata rule be not applicable?
Thanks again for all your help!
