qbteachmt
Level 15

A Backdoor Roth is the same as a conversion. What makes it "backdoor" is that it relies on the amount in the Trad IRA being only non-deductible (all basis) and that there are no earnings (untaxed amount) and by doing it quickly, it is called Backdoor.

Also keep in mind the issuer of that 1099-R doesn't necessarily know what happened to the funds, so they code the 1099-R for the money Out. Not for what happened afterwards.

The first thing to do is confirm you have a nontaxable event. Did they have only this amount that went into the Trad IRA and was immediately converted to Roth? Or, did they also have funds in a different Trad IRA account, SEP IRA, SIMPLE IRA? Did the conversion happen immediately, or was their a delay that resulted in earnings (taxable gain) and/or a possible loss (in this most recent market)?

Because if there are other funds that are pre-tax or untaxed, you have a taxable pro rata conversion. Not a Backdoor.

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