Roth IRA conversion; do I enter gross or net amount after tax withheld

[dghemmes]

I converted $50,000 from my IRA to my ROTH IRA. I had $10,000 withheld in Federal taxes. Do I enter $50,000 or $40,000 when I enter the conversion as part of my 1099R?

[MindyB · Accepted solution]

When reporting your conversion, you should enter the gross amount of $50,000.

The IRS treats this as a $50,000 distribution from your IRA, with $40,000 being rolled over into the Roth account and $10,000 being distributed to you to pay the taxes. Since the $10,000 withheld was not deposited into the Roth IRA, that amount is not a conversion, it is treated as a regular taxable withdrawal.