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Calculation of traditional IRA basis after converting to Roth
Still not sure how to calculate the IRA basis.
- Here is the scenario: only started IRA contribution 3 years ago. Non-deductible due to income above limit. File jointly each year. contribute to IRA $5500 each year for both me and wife, then converted the full amount $5500 to Roth in the same year, resulting in the beginning of the next year, the balance in traditional IRA account is always 0.
2014: nondeductible contribution to traditional IRA $5500. contributed and converted to Roth in 2014
2015: nondeductible contribution to traditional IRA $5500. contributed and converted to Roth in 2015
2016: nondeductible contribution to traditional IRA $5500. contributed and converted to Roth in 2016
So, what is the traditional IRA basis for 2014, 2015 and 2016?
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Calculation of traditional IRA basis after converting to Roth
The basis in your Traditional IRA right after you made your contribution each year was $5,500. As soon as you did the Roth conversion, your Basis went to zero. So, as of December 31 of each year, your Traditional IRA had a basis of Zero.
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