EDIT: Issue resolved through additional research. This can be deleted.
Hi, I was hoping someone could help me 🙂
I had 2 IRA accounts. Roth, that I had open for several years. And in 2023 I opened Traditional IRA account as well. I contributed $3000 of my own after-tax money to Traditional, and $3500 to Roth.
Later same year, I decided to stick with just Roth and recharaczized traditional account to Roth. Which combined their value into one.
I received the 1099-R form saying my total distribution was $3500 ($3000 original contribution and $500 market gain).
When I enter all this information in TurboTax, it claims that the entire $3500 is taxable, which makes no sense, since I have a cost basis of $3000 of tax paid money and the amount I expect to be taxable is just the gain of $500. Is this correct? And if so how do I properly enter this in TurboTax? I found an option "Nondeductible Contributions" where you can adjust cost basis, but it only references years past contributions (2022 and earlier).
Any help would be appreciated. Thank you!
