Recharacterization on IRA Contributions Worksheet

[RecharacterizationQuestion]

I overcontributed to my 2019 Roth IRA in February of 2020.  I recharacterized it in may of 2020 (within the deadline for recharacterization I believe).  I'm currently filling an amended tax return for this.  I'm trying to determine how to correctly fill out the IRA contributions worksheet in light of the fact that the fund the Roth was invested in lost money between the contribution and the recharacterization.  I'll make up numbers to demonstrate what happened:

- Roth Contribution: $6000

- Roth Limit: $1000  (over-contributed $5000)

- Fund loses 10% between Contribution and Recharacterization

- Recharacterize $4500 (the original $5000 - 10% of $5000)

IRA Contributions Worksheet

Field 20: Enter regular Roth IRA contributions made for 2019, including any made between 1/1/2020 and 7/15/2020, any amount later recharacterized to a traditional IRA, and any excess contributions, but not including any rollovers or conversions.

$6000

Field 23: Enter contributions recharacterized to a traditional IRA:

$4500 (cash) or $5000 (value at contribution time)?

Field 25: Roth IRA contributions. Combine lines 20 through 24.

Will be $1500 or $1000 depending on the answer above. 

Field 26: Enter any contribution included on line 25 withdrawn before the due date of the tax return.

$500 or 0?

If I put $4500 in field 23 this will list a contribution of $1500 in field 25.  That is above the $1000 limit, but it fails to account for the loss of $500 from the over-contributed amount before recharacterization.  At first I thought I should put the additional $500 in field 26.  But now I'm questioning if instead Field 23 should be $5000, or if I'm just doing this entirely wrong.

Thanks for any help!!

[DanaB27 · Accepted solution]

You will enter the recharacterization when you enter the contribution to the Roth IRA

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Roth contribution amount $6,000
7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount you switched $5,000 (no earnings or losses)
8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx loss were recharacterized.
9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if you are thinking about doing a backdoor Roth. If you have a retirement plan at work and are over the income limit it will be nondeductible and you only get a screen saying $0 is deductible)

Field 20 correct

Field  23 $5,000

Field 25 $1,000

Field 26 $0