Never convert Backdoor Roth, do I need to pay taxes for the gain. Have separate acct for Backdoor Roth. Do I pay taxes on gain when convert? Only have 401K and Roth.

Ok ... what ?  Did you make traditional IRA contributions then fail to make the conversions ?  

We made Backdoor Roth contributions...not tranditional IRA.

Ok ... to do a backdoor roth you had to start with a traditional non deductible  IRA contribution then make the conversion ... so is that what you did ?   Your question said you never made the conversion all these years.

Yes, we started with a traditional "non deductible" IRA (we have separate accounts exclusively for Backdoor Roth).  And, Yes again.  We never made a conversion all these years.  thanks...

A "backdoor Roth" *is* non-deductible Traditional IRA contributions then converted to a Roth IRA.

There is no such thing as "backdoor Roth contributions".

Are you saying that you made non-deductible Traditional IRA contribution and never filed the required 8606 form each year to report the non-deductible contribution?     

If that is the case, then you must file a 8606 for each year that such a non-deductible contrition was made.  There is a $50 penalty for each missed 8606 that the IRS might waive if you request a waiver.

Note: that backdoor Roth only work when no Traditional IRA account exists prior to the non-deductible contribution and then the that is immediately converted to a Roth before there are any earnings and no Traditional IRA account at all exists at the end if the year - otherwise the non-deductible basis must be prorated over the conversion and remaining IRA value so only a portion of the conversion will be tax free.    What you are describing is not a backdoor Roth.

You can get past year 8606 forms here:
<a rel="nofollow" target="_blank" href="https://apps.irs.gov/app/picklist/list/priorFormPublication.html;jsessionid=xyqs7s9wI5xmbuD5SQj3XSF6IZGzIpNH2M2-4XvE.-?value=8606&criteria=formNumber&submitSearch=Find">https://apps.irs.gov/app/picklist/list/priorFormPublication.html;jsessionid=xyqs7s9wI5xmbuD5SQj3XSF6IZGzIpNH2M2-4XvE.-?value=8606&criteria=formNumber&submitSearch=Find</a>

You would start with the first year and enter the non-deductible contribution on line 1 with any previous years contribution on line 2.  Add 1 & 2 on line 3 and 14.    Line 14 will carry to line 2 on the next years 8606 form.   That would be repeated for each year that a non-deductible contribution was made.

Thank you for your quick response.  I have filled out ALL f8606 for the year we made contributions (for Non-Deductible IRA) and ask IRS update my Non-Deductible IRA account basis.  We will mail to IRS  Once IRS update the contribution basis, we plan to convert ALL to Roth.  Can we do it?  Can we convert entire account balance to Roth and without paying taxes on gain/growth?... As I stated this Non-Deductible accounts are exclusively used for Non-Deductible contributions... no traditional IRA contributions included.

You will pay taxes on the earnings since you can only safeguard the contributions using the 8606 ... this is an unfortunate consequence of not converting timely.   And you alluded to having more than one traditional IRA account ... one you used just for the BDR  but did you have any other traditional IRA accounts during this time frame ?

Single K and SEP (closed already)... some years had SEP acct (when made contributions)  but rollovered to 401K...

"As I stated this Non-Deductible accounts are exclusively used for Non-Deductible contributions... no traditional IRA contributions included."   There is no such thing as a "Non-Deductible account".  Non-deductible IRA contribution are no different than any other IRA contribution and the IRA non-deductible basis applies to all Traditional IRA account in aggregate.

You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts which include SEP and SIMPLE IRA's.   (For tax purposes you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together).

For example using rough figures: if you had $60K of nondeductible contributions in an IRA with a total value of $600K (10:1 ratio), then when you take a $60K distribution from any IRA account $6,000 would be nontaxable and $54,000 would be taxable (same 10:1 ratio) , with the remaining $54K of basis staying in the IRA for future distributions.  As long as there is any money in the IRA, there will be some basis.

TurboTax will ask for your non-deductible "basis" and then the *Total Value* of *all* Traditional IRA, SEP and SIMPLE accounts as of Dec 31, of the tax year.   That is so the prorating of the basis can be properly proportioned between the current years distribution and the remaining IRA value.   That is done on the 8606 form.

This so-called “back-door Roth”  method ONLY works if you have NO OTHER Traditional IRA accounts.  If you do, then the non-deductible part must be spread over ALL accounts and cannot be withdrawn by itself.  Only if you started with NO Traditional, SEP & SIMPLE IRA and ended up with a zero amount in ALL Traditional, SEP & SIMPLE IRA accounts will this Roth conversion not be taxable.

So, I need to find out ending balance of my SEP for each year?  even I didn't convert any...

Only pre-tax money in your traditional IRAs is permitted to be rolled over to the 401(k), so the rollover of your SEP IRA (a type of traditional IRA) to the 401(k) moved only pre-tax money and left the after-tax, nondeductible traditional IRA contributions in your traditional IRAs.  If you made no other traditional IRA distributions beyond those mentioned here, there is no need to know the year-end balances for prior years.

To calculate the taxable amount of your Roth conversion Form 8606 for the year of the conversion needs to know your basis in nondeductible traditional IRA contributions (from your the Form 8606 filed for the most recent year prior to the year of the Roth conversion, the amount of any new nondeductible traditional IRA contributions for the year of the Roth conversion, the amount of the Roth conversion, and the balance in traditional IRAs at the end of the year of the Roth conversion.

Presumably your current balance in traditional IRAs is greater than your basis in nondeductible traditional IRA contributions, otherwise you would not have asked the original question.  Is there some reason that you do not want to roll more from your traditional IRAs over to your 401(k) so that you'll only have your basis in nondeductible traditional IRA contributions remaining to convert to Roth nontaxably, rather than having the conversion be partly taxable and partly nontaxable?

Thank you soooo much for the answers.  It helps me a LOT; especially for the year-end balance issues.  I am confused about what you wrote "so that you'll only have your basis in nondeductible traditional IRA contributions remaining to convert to Roth nontaxably".  Yes, all the balance in our IRAs is Non-D basis + gain/growth.  Does that mean we will not pay any tax when we convert to Backdoor Roth... even gain/growth?  Thanks...

If after you do the Roth conversion, if there is any value in any Traditional, SEP or SIMPLE IRA account anywhere, then as said above, the non-deductible basis must be prorated between the conversion amount and the year end  total value so only a part of the conversion will be non-taxable.

Only if no such account exists at years end will all of the non-deductible basis be applied to offset the taxable amount.   If the amount converted exceeds the amount of non-deductible (after-tax basis) the excess (gains and growth) is taxable income.

Understand now... couldn't say how much I appreciate for the help from you all.  

If the amount in your traditional IRAs exceeds your basis in nondeductible traditional IRA contributions as is apparently presently the case, some portion of your Roth conversion will be taxable.

Traditional IRAs are not segregated between earnings and other amounts.  Traditional IRAs simply contain some Fair Market Value (total balance) and some amount of nondeductible contributions.  Perhaps your balance happens to exceeds your basis by the amount of earnings in a particular IRA account, but that's not really relevant.  It doesn't matter how the amount that is in excess of your basis came to be in your IRAs, whether it be from investment gains or from deductible contributions.  The amount that is in excess of your basis is taxable when distributed (and not rolled over) or converted to Roth.

SIGH!  I understand now... sadly say "should've converted the same year we made contributions.  We didn't know.  Sometimes, Financial advisor are a sales only.  This is the lesson we pay price to learn.  Thanks again,  I'd like to comment how helpful I received from you people... but, couldn't find the area let me make comments.  Anyway, thanks a LOT.  

Now, I have another question... It seems I will be required to pay capital gain (dividends + price growth).  It's long term capital gain, right?  (it's over 1-1/2 years since my last contribution).  Can I use the long term carryover loss to offset my long term gain?  thanks...

No.  Investments in an IRA are not subject to capital-gains treatment.  Taxable amount distributed from an IRA are taxed as ordinary income.

Thanks... So, can I use long term carry over loss to offset my ordinary income?

No.  Gains and losses within a IRA only increase or decrease the IRA value and are not reportable outside of the IRA.  (There was a provision that allowed a 2% of AGI itemized deduction of loss of IRA basis when all IRA accounts were liquidated and the total distribution was less that the unrecovered after-tax basis but Congress eliminated that for 2018-2025).

What I meant is I am going to convert IRA to Roth.  I know it will generate gain/ordinary income.  Can I use carryover loss to offset the conversion tax liability?

After being applied against capital gains, $3,000 of capital losses (or all of you remaining capital losses, whichever is less) can be applied against ordinary income per year.  The remainder of your capital losses carries forward.

Thanks... say I have $50K carryover loss, my Nod Deductible IRA acct has $60K balance including $20K gain (net of contribution basis).  I plan to convert ALL $60K to Roth this year.  I assume I don't need to pay taxes on the basis of $60K (accumulated over years).   Can I apply $20K to offset $50K carryover loss ... without paying any taxes?...

NO .... you cannot net cap losses directly against ORDINARY income ... ALL distributions from the IRA are treated as ordinary income.  All you can do is net cap gains against any cap losses that you have and then you are limited to no more than $3000 of cap loss against ordinary income per tax year.  If you sell no stock this year but convert the $60K to a roth you will pay taxes at an ordinary income tax rate on $17K ( $20K - $3000) and the rest of the $47K loss is carried forward to the next tax year.

You have to stop thinking that any of the earnings in the IRA are capital anything even if you were invested in the stock market.  What happened inside an IRA has no bearing on the tax treatment of the distributions.  That is the deal with IRAs... they are called tax shelters for a reason ... you put ordinary income in it today and avoid ordinary income taxes on that contribution AND the earnings are sheltered from taxes as long as they stay in the IRA  HOWEVER once you take any distributions (after the basis is considered on the non deductible contributions) they are ALL taxed as ORDINARY income.