Enter the original Roth IRA contribution of $7,000. When TurboTax indicates that this is an excess contribution, indicate that you "switched" (recharacterized) $7,000 to be a traditional IRA contribution instead. This will cause TurboTax to prompt you to enter an explanation of the recharacterization where you'll indicate that a gain-adjusted amount of $7,016 was transferred to the traditional IRA to accomplish the recharacterization of the $7,000 contribution. Enter the code-N 2025 Form 1099-R that you received, but this will have essentially no effect on your tax return since the recharacterization is indicated via the entries in the contribution section.
The $7,062 Roth conversion will be reportable on your 2025 tax return. The Roth conversion is not a 2024 operation because it did not occur in 2024. If the resulting traditional IRA contribution in 2024 was nondeductible, your basis in nondeductible traditional IRA contributions shown on line 14 of your 2024 Form 8606 will carry forward to line 2 of your 2025 Form 8606 to be applied to the Roth conversion.
