I did a backdoor roth in Vanguard in 1/2020. Then I also asked my 401k provider to do an In-service withdrawl from my 401k in 8/2020. This resulted in a split contribution to an existing traditional IRA and existing ROTH IRA at Vanguard. The earnings went to the IRA and the After tax 401k contributions went the ROTH IRA.
Form 5498 shows an IRA contribution of 6000, and a Rollover contribution of 6008.18.
6000 is my own contribution, and the 6008.18 is the earnings as a result of the in-service rollover from 401k.
I'm assuming this doesn't violate the yearly maximum contribution limits, as one is a contribution, and the other is a rollover.
I'm finding it difficult to enter this into TurboTax so I am not double taxed.
My first attempt resulted in a calculation that shows $3159 of the contribution not being taxable, which results in $2841 being taxable. If I contributed and rolled over to a roth ira in the same year, and there are no earnings on that contribution, I believe the full 6000 should not be taxed.
Looking at the Nondeductible IRA Form 8606, I have no idea how the $3159 is being calculated, as it simply has an asterisk to another distrubtion worksheet. Which states:
Traditional IRA Basis and Value
Year-end Value 12/31/2020: $37,112
Basis carryover 12/31/2020: $19341
The only thing you enter from the 5498 is your contributions to IRAs, which might or might not be deductible or over the limit.
A custodian-to-custodian rollover will not generate a 1099-R (certainly not for an IRA, not certain about a 401k to IRA).
You enter Roth conversions by entering the 1099-R that shows the conversion and answering the interview questions about the conversion. For example the 1099-R for the conversion will show the conversion amount and box 7 code might be 2 ("early dist exception applies").
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