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IRA contribution recharacterization, then backdoor Roth IRA

I contributed $500 to my Roth before realizing I would be over the income limits, so I recharacterized to a traditional IRA ($490, a slight loss). Then I converted this to Roth ($495). Subsequently, I contributed $5500 to a traditional IRA and then converted to Roth.

I received two forms 1099-R.

  • The first (recharacterization) shows: a distribution of $490 (Box 1), $0 taxable (Box 2a) and Code N (Box 7)

  • The second (both conversions) shows: a distribution of $5995 (Box 1), $5995 taxable (Box 2a), Taxable amount not determined (Box 2b), and Code 02 (Box 7)

I think I entered this all correctly into Turbotax. The 1040 shows IRA distributions of $6485 (4a) and taxable amount of $0 (4b). It seems like it is double-counting the recharacterization... Should 4a show $5995 only? Or is this correct? Thanks!

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1 Reply
KrisD15
Expert Alumni

IRA contribution recharacterization, then backdoor Roth IRA

That sounds right. 

The program is adding both conversions, even though part of one conversion is included within the other. 

It will match the 1099-R's the IRS has on file and the tax is properly calculated. 

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