Well, I just learned something; my previous suggestion that TurboTax would automatically treat the nondeductible portion as coming from the portion contributed before year-end was wrong. In reviewing Form 8606 lines 1 though 4 in TurboTax, I now see that TurboTax automatically treats that portion contributed *last* as the nondeductible portion of your contribution. This means that TurboTax's programming treats your conversion as taxable and carries your $2000 of basis over to 2017.
However, the instructions for line 4 of Form 8606 say:
"If you made contributions to traditional IRAs for 2016 in 2016 and 2017 and you have both deductible and nondeductible contributions, you can choose to treat the contributions made in 2016 first as nondeductible contributions and then as deductible contributions, or vice versa."
To force TurboTax to treat this the way you desire, I need to modify my previous instruction. You must indicate that NONE of your contribution was made between January 1 and April 18, 2017. This will result in Form 8606 line 4 showing zero (as permitted by the IRS) and your entire $2,000 of basis will be applied to your $2,000 Roth conversion. Do not use overrides.
Thanks for the follow-up. I learned something new about TurboTax.
