contribute nondeductible money to traditional IRA and convert to roth each year, what should IRA basis be?

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Hello

I am making nondeductible contribution to traditional IRA and convert to roth each year. What should the total basis for traditional IRA in line 2 from form 8606 be? Should it be 0 all the time? Or should it be the total amount of nondeductible contribution I made from previous years? (Increasing each year, for example : 6000$ -> 12000$ -> 18000$ ..) Thanks!

fanfareAnswer

Level 15

In almost all cases, it will be zero at the end of each year because you used that basis to avoid tax on the conversion.

To do another tax free Roth conversion you need to start fresh with a zero basis.

ColeenD3

Alumni - Intuit

If you are converting your Traditional IRA to a Roth, then those funds are not your basis for the Traditional IRA. They are the basis of your Roth.

yutinghe2012Author

Level 2

So total basis for traditional IRA should be 0 if I converted all to roth right? (Assume previous year basis was 0, I contribute 6000$ nondeductible to traditional IRA and converted all to Roth)