topic Roth conversion on 12/31 taxable on Form 8066? in Retirement tax questions

Roth conversion on 12/31 taxable on Form 8066?

chick99chick — Sun, 03 Jan 2021 18:26:01 GMT

I attempted to do a backdoor Roth conversion ($6k from Traditional IRA) prior to 12/31, but the actual conversion was executed on 12/31. Form 8066 asks on Line 6 asks if I had any balance in my traditional IRA
"as of December 31?" I guess technically at the start of the day on 12/31 I had $6k, but after the conversion and at the end of the day it was 0. How does this language work in terms of having a zero balance in my Traditional IRA by the end of the year?

Re: Roth conversion on 12/31 taxable on Form 8066?

Critter-3 — Sun, 03 Jan 2021 18:30:09 GMT

End of year balance means the last second of the year not the first minute of that day ... so if the conversion was actually recorded on 12/31 then the Dec will show that and the bottom line will be a zero.

Re: Roth conversion on 12/31 taxable on Form 8066?

dmertz — Sun, 03 Jan 2021 19:45:29 GMT

The question is essentially asking the total of your traditional IRA balances that were carried into the following year, in this case apparently $0.

Re: Roth conversion on 12/31 taxable on Form 8066?

sandy4042 — Mon, 04 Jan 2021 07:33:12 GMT

I noticed further on that form they take line 6 (zero in your case) and add back any distributions taken (line 7) and Roth conversions during the year (line eight) to yield line 9, which gets you back to your account balance before the Roth conversion. Then line 9 is used as the denominator in the pro-rata calculation of what portion of your Roth conversion is nontaxable.

Re: Roth conversion on 12/31 taxable on Form 8066?

fanfare — Mon, 04 Jan 2021 22:19:42 GMT

@sandy4042 since line 6 could be zero, as in this case, if you think about it, it has to be that way.