My traditional Roth gained $5 before I did a Roth conversion. However, TT is ignoring the $5 so no taxes are being assessed. Any idea how to correct?

[mccoy1702]

Correction:  My traditional IRA (zero basis at year end) had the $5 gain.  I had a similar situation last year with a $2 gain, but was taxed as expected on the $2.  I'm using the online version of TT, so I can't see Form 8606.

[KurtL1]

When you do a Roth Conversion you are taxed based on the amounts you pull out of the Traditional IRA and move to the Roth IRA.

You are not taxed on the increase in balance of the IRA but are only taxed when you disburse funds from the IRA.

Form 8606 keeps track of transactions on your Non Deductible IRA's.

[dmertz]

Are you sure that the $5 is not being included on line 4b of Form 1040?  Because of the stepwise nature of the tax tables, a $5 increase in your taxable income only has about a 10% chance of increasing your tax liability.

(I assume that you meant to say that you had no money in traditional IRAs on December 31, 2019, otherwise I would expect more of your Roth conversion to be taxable on your 2019 tax return.)

[mccoy1702]

Yes, I meant to say my traditional IRA (I made a correction in a follow -up post).

The $5 is not showing up on the 1040 based on the preview view.  Yes, the impact on the tax is minimal, but I can't figure out why the software isn't finding it.  As noted, it picked up on a $2 gain last year.

Thanks for responding.