Calculating IRA basis

Forum|Forum|4 years ago
March 18, 2022
1 reply
4 views

I have contributed post tax money to a nondeductible IRA in 2019, 2020, 2021 of $6000 each year. Each year, I have completed a back-door roth IRA conversion that same year that I have contributed to my nondeductible IRA. My first year (2019) basis was zero. My question is, does my basis increase each year by $6000 or does my basis return back to zero once that back-door roth ira conversion was performed.

ErnieS0

Level 15

Your basis goes back to $0 once you complete your backdoor Roth conversion.

The whole idea of a backdoor Roth is to put after tax money into a Roth so you don't have to do a taxable conversion. This is done by funding a Traditional IRA with after tax dollars and moving that into a Roth when your income is too high to make a normal Roth conversion.

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