dmertz
Level 15

Retirement tax questions

The amount reported on the code R Form 1099-R is the amount transferred, not the amount recharacterized.  Your 2017 tax return only needed to reflect the amount recharacterized by showing it on Form 8606 as a nondeductible traditional IRA contribution.  Any explanation statement included with your 2017 tax return is where you would have mentioned the gain-adjusted amount transferred.  If you didn't include any explanation statement regarding the recharacterization, there is no point to amending just to add the explanation.  If the IRS ever wants explanation of the recharacterization, they'll ask for it.

Note that you and your husband made nondeductible traditional IRA contributions.  You do not have "nondeductible IRAs" since all IRAs owned by an individual are treated as a single account for the purpose of determining the taxable amount of distributions.