qbteachmt
Level 15
04-11-2025
01:10 PM
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The 1099-R is for money Out. The issuer doesn't know what all was done afterwards.
You, the tax preparer, use the software to account for what happened next.
As long as the person making the backdoor rollover has no other funds in any Trad IRA, SEP IRA and SIMPLE IRA, then there is no taxable event. They needed to end the year with $0 FMV.
"The make contribution and roll it, almost immediately, into the Roth."
The nondeducted contribution is Basis. On your worksheet, you will enter their Basis, only their post-tax contributions are Basis. If there is even a bit of earnings, that creates a pro rata taxable conversion.
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Don't yell at us; we're volunteers