A "backdoor Roth" is absolutely legal and done all the time. It is a 2 part process:
1) Enter a non-deductible Traditional IRA contribution in the IRA contribution section first.
2) Enter the 1099-R with the Traditional IRA distribution and say that it was converted to a Roth.
Answer the non-deductible basis questions as in my answer above. The non-deductible contribution will cancel the tax on the conversion.
However, This so-called “back-door Roth” method ONLY works if you have NO OTHER Traditional IRA accounts. If you do, then the non-deductible part must be spread over ALL accounts and cannot be withdrawn by itself. Only if you started with NO Traditional, SEP & SIMPLE IRA and ended up with a zero amount in ALL Traditional, SEP & SIMPLE IRA accounts will this Roth conversion not be taxable.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
