form 8606

[illuminato]

Hi. I have a question about taxes that I filed for 2021 year.

In 2020 I contributed to trad IRA $6000 (maximum allowed IRS limit) as after tax money and bought some ETF with this. I used form 8606 to report them as nondeductible contributions.

In 2021 I sold those ETF on tad IRA and got $5986. So it was loss of $14. Now I added additional $6000 (maximum allowed IRS limit) as after tax money to trad IRA. So in total it my trad IRA had $11,986. All those funds are after tax money. Now I transferred those funds to Roth IRA.

I got following tax forms for 2021:

1 Gross distribution: $11,986

Taxable amount not determined: X

Total distribution: X

7 Distribution Code: 2

IRA/SEP/SIMPLE: X

All other filed are empty

and also I got form 5498 for IRA contributions.

1.IRA contributions: $6,000.00

I used tax software and here is form 8606 that was generated:

1. 6,000.

2. 6,000.

3. 12,000.

5. 12,000.

13. 11,986.

14. 14.

16. 11,986.

17. 11,986.

21. 0

My concern is about line 14. It looks like it says that I had $14 in my account after trad IRA to roth IRA transfer but it is not correct because $11,986 is total amount of money that was in account. $14 is just loss from investment.

[ThomasM125]

Line 14 is your basis in traditional IRA's at end of year. Since you transferred all of your traditional IRA money to the ROTH IRA, your basis in the traditional IRA would be minimal.