Why is my IRA basis not being subtracted from my backdoor Roth conversion distribution?

n-mo · ‎June 4, 2019

In 2017 and 2018 I made non-deductible Traditional IRA contributions. I filed a Form 8606 with my 2017 return. In 2018, I did a backdoor Roth conversion of the combined contributions from 2017 and 2018, this generated a 1099-R in 2018.

Now in preparing my 2018 return, the IRA basis from the 2017 Form 8606 is not being subtracted from the backdoor Roth conversion distribution, meaning that I have taxable income. The 2018 non-deductible Traditional IRA contribution is being subtracted, but this is only half the total amount.

Is this a bug in TurboTax? I am not expecting to pay tax on these after-tax, non-deductible contributions. I have tried deleting the 1099-R and adding it back in, no effect.

Any help is much appreciated.

DanaB · ‎June 4, 2019

Did you answer "yes" to "Any nondeductible Contribution to your IRA?" and answer the questions about the basis? These questions come after the "Your 1099-R Entries" screen when you click "continue".

n-mo · ‎June 4, 2019

Yes, after all the hurricane/disaster questions ("no"), I answered "Yes, I made and tracked nondeductible contributions to my IRA," entered my Total Basis as of December 31, 2017, then entered the "Value of your Traditional, SEP, and SIMPLE IRAs on December 31, 2018" ($0). Whether I enter $5,500 or $0 as my Total Basis, it does not have an effect on my taxable distribution. I do not believe this is correct.

n-mo · ‎June 4, 2019

(duplicate post)

n-mo · ‎June 4, 2019

(duplicate post)

DanaB · ‎June 4, 2019

The whole amount shows on line 4b (taxable amount) on Form 1040 even when you have entered the basis?

n-mo · ‎June 4, 2019

Half the amount shows on line 4b. It shows the amount of the distribution minus my 2018 Traditional IRA non-deductible contribution, but if I put zero or $5,500 as the IRA basis, it has no effect. I think this is a bug in the code.

n-mo · ‎June 4, 2019

If anyone else runs into the same problem, I was able to fix it by clicking through the "EasyGuide" to calculate my IRA basis and making some corrections.

Why is my IRA basis not being subtracted from my backdoor Roth conversion distribution?

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