Background: Last year, I recharacterized my 2022 Roth IRA and 2023 Roth contributions to a regular, non deductible IRA. I fully funded the 2022 Roth ($7k) and funded about $2k of Roth in 2023 before recharacterization. Cost basis in this new IRA was $9k.
Question: I sold the non deductible IRA shortly after recharacterization when I was at least 59 1/2 years old. How do I report this transaction in TT and what would my tax be? I assumed I would just pay tax on the gain (actually, I sold at a loss) . TT 2023 desktop however seems to to be doing a proforma calc with an onerous tax bill.
You will get the desired result when you inform TurboTax of your basis of $9,000.
It’s not the result I desired but what it is. The prorata rule came into play.
If you liquidated your IRA with $9,000 basis for less than $9,000,
your taxable amount should be zero.
If you're saying the liquidated IRA already had a basis of $9,000 then a recharacterization marked non-deductible
will give you a new basis of $18,000.