Q: I have a question about taxes that I filed for 2021 year.
In 2020 I contributed to trad IRA $6000 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 as after tax money to trad IRA. So in total it my trad IRA had $11,986. All those funds are after tax money. 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
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
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
A: You need to enter your basis (amount your contributed that was nondeductible). Based on what you shared, the result should be no taxable distribution.
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