Our income exceeds the threshold to contribute to a Roth normally, so in Jan 2023, my husband contributed $6500 to a traditional IRA and immediately converted it to a Roth IRA as a backdoor Roth as he has done for a number of years previously. However, at the end of December 2023, he was unexpectedly forced to roll over one of his 401ks to a traditional IRA (ugh), thus triggering the pro rata rule on his earlier $6500 Roth conversion.
Our understanding of the situation is that now he has a basis of $6500 in his traditional IRA from now and going forward, and that only something like 2% of his contribution is tax deductible because of how much is now in his traditional IRA after the rollover, meaning that the taxable amount of his contribution is slightly less than $6500, and that this is normally calculated on form 8606. However, after entering both 1099-Rs and going through the step by step, form 8606 is not actually triggering. No matter what I click, I either get all of the $6500 being deductible or none of it.
My question is how and when does form 8606 get triggered in TurboTax (so that I can make sure the taxable amount is reported correctly)? Also, should I be reporting this $6500 contribution as deductible or non-deductible?
Details on the 1099-Rs:
On the Backdoor Roth contribution, the only boxes that have anything in them are
1: $6500
2: $6500
2b: checked
7: 2
IRA/SEP/SIMPLE: checked
15: Has State/Payer’s state no
On the 401k rollover:
1: Amount of account rollover
2a: 0.00
7: G
