Recharacterization of Maximum Contribution + Gains

[bamberblue]

I forgot that I am above the MAGI limit for Roth and made the maximum contribution directly to my Roth. A few months later, I had my financial institution recharacterize the funds and they told me I should transfer the original contribution plus the gains to my Traditional IRA and then move it back to the Roth to do the backdoor. I received the 1099-Rs from my financial institution and it shows the taxable amount as the maximum contribution + the gains. Is this correct that I should be taxed for the contribution + the gains?

[SusanY1]

It sounds like the 1099-Rs are issued correctly.  The amount will show as taxable in box 2a.  This is because each 1099-R has to be processed as a stand-alone item.  The 1099-R showing the distribution from the Traditional account has to be manually accounted for on the tax return with the Roth IRA contribution.  This is why it is commonly referred to as "backdoor" - it's a strategy that requires a little maneuvering to accomplish as there is no code to report nondeductible IRA funds going to a Roth (plus, there are some additional requirements such as not having additional traditional IRA balances). 

You will find information about how to enter this in TurboTax HERE.