Do the contributions and earnings for a Roth IRA recharacterized to a non-deductible traditional IRA go on line 1 on form 8606?

[sunnyboy2]

I ended up contributing to a Roth IRA in 2016, however earned over the income limit. I recharacterized my 2016 Roth IRA contributions to a Non Deductible Traditional IRA for 2016, and then converted the 2016 Non Deductible Traditional IRA contributions to a Roth IRA in 2017. I also set up a backdoor Roth IRA for 2017. 

I received a 1099-R in the amount of $5300 ($5000 contributions + $300 earnings) that is entered on line 15a on the 1040. 

My question is on the 8606 for 2016: Should the amount for line 1 be the original 2016 employee contributions of $5,000?  Or the employee contributions + earnings for a total of $5,300?  Or something else?   

Thanks for your help! 

[dmertz · Accepted solution]

The earnings required to be transferred with the recharacterization do not go on Form 8606 line 1.  They are not part of the amount that was recharacterized.  If you contributed $5,000 to a Roth IRA, it grew to $5,300, then recharacterized your entire contribution, $5,000, not $5,300, has been recharacterized.  The amount required to be transferred to the traditional IRA, $5,300, is the sum of the $5,000 being recharacterized and the $300 of earnings.  In this case, Form 8606 line 1 should show $5,000.

The Form 1099-R reports the amount transferred, not the amount recharacterized.  In the case of a code N or R Form 1099-R that has a nonzero box 2a, one can infer that the amount in box 1 minus the amount in box 2a is the amount that was recharacterized.

[sunnyboy2]

Thank you for clearing that up for me!