Because there was no basis in nondeductible traditional IRA contributions, all of the conversions were taxable conversions. Assuming no basis in regular Roth IRA contributions, the Coronavirus Related Distribution came from conversion basis, FIFO under the Roth IRA ordering rules, removing all $11,369 of the conversion basis from 2018 and before, and $11,500 of the 2019 conversion basis. Assuming that no part of the CRD was repaid, the resulting net taxable conversion basis is:
2018 and before: $0
2019: $2,500
2020: $8,740
Because the distribution in 2023 occurred before completing the 5-year period for the 2019 and 2020 conversions, the entire distribution is subject to the 10% early-distribution penalty on Form 5329. Just the earnings are includible in income on Form 1040 line 4b.
