The $1,000 that was recharacterized from Roth to traditional after year-end is referred to as an outstanding recharacterization and is treated as if the funds had been in the traditional IRA at year end. On the page where TurboTax asks for your year-end balance, TurboTax also ask for the amount of any outstanding rollovers or recharacterizations and will automatically combine these values for reporting on Form 8606 line 6.
