Trying to determine how reporting works on Form 8606. My wife has a basis of ~5000k from prior year in her Traditional IRA. Earlier in the year we did a reverse rollover of funds from her traditional IRA to her 401k at work (leaving the basis), followed by a rollover of the basis from the traditional IRA to a Roth IRA, leaving it with a zero balance.
We also realized that this year we're over the income threshold for the usual roth contributons, so we subsequently recharacterized the roth contribitions made YTD into a second (zero balance at start of year) Traditional IRA account, and made remaining non-deductible contributions to the Traditional IRA.
Now we're at the end of the year and we want to convert what has grown to ~$7000 to a Roth IRA. However, the last $250 contribution, made just last week, is showing as a credit with Vanguard, but hasn't yet cleared and is unavailable for the Roth conversion.
I'd wanted to end up with no pre-tax and no after-tax funds in the IRA as of 12/31, but now am doubting that's possible. I don't want to run afoul of the pro-rate rule. I'd wanted to have a zero balance in the traditional IRA account as of 12/31 of the current year, but don't think that will be possible. Will I run afoul of the pro-rata rule? How doess this impact reporting on form 8606?
We also realized that this year we're over the income threshold for the usual roth contributons, so we subsequently recharacterized the roth contribitions made YTD into a second (zero balance at start of year) Traditional IRA account, and made remaining non-deductible contributions to the Traditional IRA.
Now we're at the end of the year and we want to convert what has grown to ~$7000 to a Roth IRA. However, the last $250 contribution, made just last week, is showing as a credit with Vanguard, but hasn't yet cleared and is unavailable for the Roth conversion.
I'd wanted to end up with no pre-tax and no after-tax funds in the IRA as of 12/31, but now am doubting that's possible. I don't want to run afoul of the pro-rate rule. I'd wanted to have a zero balance in the traditional IRA account as of 12/31 of the current year, but don't think that will be possible. Will I run afoul of the pro-rata rule? How doess this impact reporting on form 8606?
Statistics: Posted by dje7 — Tue Dec 26, 2023 10:01 am — Replies 0 — Views 17