non roth contributions when completing the 8606
I have read in several IRA discussions that you have to consider the total in your TIRA when converting a portion of the TIRA to a Roth. How about what WAS in your TIRA in the past but has already been converted to the Roth….if you put $1000 into a TIRA that now has 0 in it because you already moved it to Roth in years past and then move the $1000 to a Roth? What do you have to consider as taxable. I assume the $1000. You dont have to go back to what you had in the TIRA in the past do you?
Roger
Permalink Submitted by Alan - IRA critic on Wed, 2013-03-27 00:19
No, you do not go back to prior years. However, you do have to go forward to 12/31 of the conversion year to determine the TIRA balance on that date even though the conversion done earlier in the year could have been a total conversion at the time. In completing the 8606 you enter the 12/31 balance of your non Roth IRAs, so if you roll a 401k into your IRA after the conversion it will make your conversion mostly taxable if it otherwise would not have been. In the same token, if you roll your pre tax TIRA balance after the conversion but before year end into a 401k or other plan, it can make an otherwise taxable conversion into a non taxable one if you have basis in your IRA on Form 8606.