Should line 14 on the 8606 be used as my IRA basis when concerting? I filed starting in 2019. Line 14 gave me a $7K Traditional basis. Same for 2020 but went to 14k.

[OKevinP]

in 2021 the 8606 line 13 had and asterisk after the 7K and line 14 remained at 14K. The only difference in each entry was when the $7K was deposited. In 2019 and 2020 I deposited between Jan1 and Apr 15 for the tax year, and my 2021 deposit was made in early 2021. I I claimed the contribution in 2019 and 2020, before the 1099R were converted from Trad to Roth. I this right? What did I do wrong if anything?

[tagteam]

@dmertz can most likely answer this question.

[dmertz · Accepted solution]

If the only Roth conversion you made was a $7,000 conversion in 2021, no conversions before that, what you describe sounds right as long as there were no gains in the traditional IRA (possibly losses).  In 2021 you would have added a $7,000 nondeductible contribution and used $7,000 of the basis, resulting in no net change to the basis carried over to 2022.  If this description does not agree with what actually was done, you've probably made one or more Form 8606 errors somewhere between 2019 and 2021.

[OKevinP]

No I think you miss understood. In 2019 I started doing the conversions from trad to Roth.. I have never had any traditional ira’s

when I filed in 2019 and 2020 it added 7k each year to the line 14 on the 8606. In 2021 it did not. The only difference in my entries was “when” I deposited the funds. In 2019 I deposited in 2020 before the filing date so it was considered a 2019 contribution.it was immediately converted to a Roth. Same for 2020. In 2021 I was able to contribute early in 2021 for that tax year? Make sense?

[dmertz]

Then you appear to have made an error on your 2020 Form 8606 by it not showing some of your basis being applied to a Roth conversion.  It seems that your 2020 Form 8606 should have had only $7,000 on line 14.  If you have other funds in traditional IRAs, the basis applied you your Roth conversions would be less than the amount converted, but the numbers that you've mentioned suggest that you have no other funds in traditional IRAs.

[OKevinP]

2018 no 8606 filed

2019 line 14 showed 7k line 13 blank

2020 line 14 showed 14k line 13 blank

2021 line 14 showed 14k line 13 7k with *

7 k each year was converted 

make sense?

[dmertz]

It seems that you failed to report on your 2020 tax return the Roth conversion that you did in 2020.

[OKevinP]

Now I am more confused sorry

2019 and 2020 8606’s populated the same on line 14? 2021 is when line 14 remained the same and line 13 got populated?? I am missing something is there some other way to discuss this?

[OKevinP]

I am reading the irs instructions and back tracking my entries. I think is see what you are referring to on the 2020 form.. I will report my findings. TT sure makes this confusing.

if I find an error will it require 20 and 21 full amendments or just to the 8606 forms ?

[dmertz]

Form 1040-X should accompany an updated Form 8606.