Existing rollover IRA/Backdoor Roth IRA question

[canaanty]

I am planning to make a backdoor Roth IRA contribution for this year. I currently have a very small rollover IRA with a balance of $2300. My understanding is that I can make a $6000 contribution to this IRA, and then convert the entire balance of $8300 to a Roth IRA prior to December 31st. Thus my traditional IRA balances will be $0.

I will then pay taxes on the $2300. I believe that this is determined on Form 8606. 

Am I correct in my understanding of how to do this?

[dmertz · Accepted solution]

Assuming that you have sufficient compensation to support the traditional IRA contribution (and will not have reached age 70½ or older during the year), you own no other traditional IRAs (implied when you said that your balance in traditional IRAs at year-end would be zero) and your investments do not change in value prior to converting to Roth (implied when you said that you would convert the entire balance of $8,300), your analysis is correct.

[canaanty]

 Thank you!