IRA conversion 8606 question
In January 2023, a 2022 contribution in the amount of $6,000 was made to an IRA. In February 2023, a 2023 contribution in the amount of $3,400 was made to an IRA. Also in February 2023 the total $9,400 was converted to a Roth. (plus $32.96 earnings).
On the 2023 Form 8606, I believe line 1 should have $3,400. The 2022 Form 8606 had $6,000 on line 1 so on the 2023 Form 8606, line 2 has $6,000 and line 3 has $9,400. I believe that line 8 should have $9,400 but my software is not pulling anything in. Or, should line 7 show $9,432.96 to include the earnings (and to match the amount shown on the 1099R). Line 16 is showing $9,433 and line 17 is showing $9,400, resulting in $33 taxable amount. My question is, what should be on line 7, if anything? And are lines 16-18 correct?
Permalink Submitted by Alan - IRA critic on Wed, 2024-01-31 15:02
Your tax program is likely one that substitutes a worksheet for the indented lines 6-12 of Form 8606. Lines 16-18 are correct. Had the program completed the full 8606, line 7 would have been 0. line 8 9,433, and lines 9-11 would have calculated the non taxable amount of the conversion which also goes to line 17. This worksheet approach is fully acceptable to the IRS.