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UCFBuckeye
Returning Member

Form 8606 - Early Distribution with backdoor roth

Hello - 

 

I did a backdoor roth that had $7 of interest growth.  

Form 8606 - Part 2 looks correct:

16:  $6,507

17: $6,500

18: $7 Taxable amount.

 

I also took an early distribution on a previous employer (401k roth) for $2,200.  I know I invested $1900 as my basis for line 22.  Which calculates a total taxable amount of $300.   

 

When I enter these independently the calculation looks correct.  When I add both at the same time its only taxing me on the $7.  The $6507 is being pulled into line 24 and canceling the additional $300 owed.  

 

What am I doing wrong?

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3 Replies

Form 8606 - Early Distribution with backdoor roth

$7 is the correct taxable amount

distribution from a 401k does not get involved in this process.

are you sure you entered the correct year-end value for your IRA?

@UCFBuckeye 

UCFBuckeye
Returning Member

Form 8606 - Early Distribution with backdoor roth

Does the distribution go on form 5329?  So frustrating as last step before I submit.  I assume I owe a penalty on the early distribution.  

RobertB4444
Employee Tax Expert

Form 8606 - Early Distribution with backdoor roth

The distribution as well as your basis go on the 5329.  Early distributions do incur a 10% penalty.

 

@UCFBuckeye 

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