2024 and 2025 Form 8606 line 2-Nondeductible contributions basis is $0

[user17727448620]

I contributed $7000 nondeducitble after-tax money in the 2024 Tax year to the Roth IRA.

Contributed $7,000 nondeductible after-tax money in 2025 to Roth IRA and recharacterized to Traditional IRA (not eligible for Roth contribution) 

Contributed $7,500 nondeducitble after-tax money in 2026 to Traditional IRA.

Converted 2025 and 2026 to a Backdoor Roth IRA.

In the 2024 and 2025 Tax return, Form 8606 Line 1, 3, 14 are all showing $7,000. 

Both my 2024 and 2025 Tax return Form 8606 Line 2 says my basis is $0 is that correct? 

Do I need to amend my tax return?

Should my basis be $7000 in 2025 Tax form (even if it was contributed to Roth IRA)? 

What is my basis for the 2025 Tax Return? (I lost money on my contributions before I performed a backdoor IRA conversion) 

What is my basis going forward for the 2026 Tax Return? All my traditional IRA is $0, and everything is in a Roth IRA. 

[baldietax]

Assuming 2024 was a valid Roth contributed as stated then your 2024 Form 8606 shouldn't have a basis and you would need to amend that so Line 14 is $0, in which case your 2025 8606 Line 2 of $0 would be correct

2024 Form 8606 Line 2 depends whether you had a basis carryover from prior years (in which case when was that converted).

What was the timing of the Roth conversions, did you get a 2025 1099-R and enter that and identity it as a Roth conversion?  The Roth conversion step is reported in the tax year it is done while contributions and recharacterizations can be backdated so if this 2025 stuff happened in 2026 then your your 2025 8606 Line 14 would be $7000 which carries over to 2026 and you would not report the conversion until your 2026 return, when you get the 1099-R in hand.

if the value of the conversion was less than the contribution amount due to a loss in the Trad IRA, then the entire conversion will be non-taxable (calculated on Form 8606) and you will be left with a basis in the IRA on 8606 Line 14 for the amount of the loss which carries forward to future years on Form 8606, even though your IRA balance is $0.  This trapped basis you can use in the future towards a nontaxable conversion of any pre-tax/earnings in the Trad IRA to Roth, if you have some future gains in the Trad IRA above the non-deductible contribution (e.g. due to a delay between contribution and conversion with some earnings).

[user17727448620]

All IRA Contributions I made are non-deductible - From after-tax dollars earned ONLY. 

2024 Roth contribution $7k 

2025 Recharacterization from Roth to Traditional on 3/11/2026 - $6,907.68  (Original contribution $7k - loss) 

2026 Recharacterization from Roth to Traditional on 3/11/2026 - $6,866.66 (Original contribution $7k - loss) 

Contribute $500 to a Traditional IRA 3/27/26 (To reach max limit $7,500 Traditional IRA for 2026)

Backdoor Roth IRA conversion of the full balance (around $14,274) of the Traditional IRA  (2025 and 2026 contributions) on 4/12/26   - $0 balance on the Traditional IRA currently 

Roth Conversion made in 2026, I will report it on the 2026 tax form when I get the 2026 Form 1099-R.

2024 Form 8606 - this would be wrong? All $7,000 was into Roth IRA only 

Line 1 - $7,000

Line 3 - $7,000

Line 14 - $7,000

Would this 2025 Form 8606 be correct?

2025 Form 8606
Line 1 - $7,000

Line 3 - $7,000

Line 14 - $7,000

The 2026 Form 8606 would be more complicated due to the Backdoor Roth

Line 1 - $7,500

Line 2 - $7,000

Line 3 - $14,500 

Unsure what line 4-25 would be?

[baldietax]

ok yes looks like your 2024 8606 is incorrect as it reflected a Trad IRA contribution.  you should just do an amendment to file a corrected 8606 - advice from experts here has been to file amendment with 1040-X to ensure it is processed even though should be no effect on your 1040.

2025 8606 looks right but make sure you enter it as the original Roth contribution then answer the recharacterization questions which will ask for the market value etc, and a recharacterization statement which will be included in your return, see guidance in comments here

https://ttlc.intuit.com/community/retirement/discussion/8606-roth-recharacterization-followed-by-bac...

For your 2026 8606 you should end up with Line 8 Roth conversion = $14274 which will all work out to be non-taxable on Line 13, and Line 14 should show the 14500-14274=226 carry over basis which will be stuck until you have some future earnings or pre-tax money to apply it against.