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Are after tax contributions to an employer retirement plan that were rolled over to a Roth IRA added to the IRA basis?
I have two questions on Form 8606 and the cumulative IRA basis.
1) I forgot to file a Form 8606 Non-Deductible IRAs for 2022 and reviewed my prior year Forms 8606 and 5498 through 12/31/2022. It looks like I'm missing a couple of Forms 8606 and 5498 (and the 8606 cumulative amounts were incorrect), but I have statements and tax returns to show the IRA contributions were made after-tax. Is it a problem that I have a couple of missing and incorrect Forms 8606 and mislaid Form 5498 from prior years?
2) In 2020, I closed an account with my employer 403(b) and made a rollover of the funds to another brokerage firm. The 1099-R shows:
Box 1 Gross Distribution $10,000
Box 5 Employee Contributions/Designated Roth Contribution or Insurance Premiums $2,000
Box 7 Distribution Code G (Direct rollover of a distribution to... an IRA)
The $2,000 represents after-tax contributions to my 403(b) plan. Thus, of the $10,000 Gross Distribution, $8,000 was a rollover to a Traditional IRA and $2,000 was a rollover to a ROTH IRA.
In the Turbo Tax guide, it asks if I had any 'rollover basis from employer retirement plans', and the answer is 'Yes'. But Turbo Tax then adds this amount to my Non-Deductible basis, is this correct, even though I rolled the $2,000 over to a Roth IRA?
What is the correct treatment? Are after tax contributions to an employer retirement plan that were rolled over to a Roth IRA added to the IRA basis?
Thank you
‎September 5, 2023
10:56 AM